In business, there are several different types of financial transactions, including payments for goods and services and refunds for products that a customer decides to return. These types of payment processes are fairly straightforward, but you may not have heard about payout processes.
A payout process is any process by which funds that have been accrued are paid out to the rightful owner of the funds. This is similar to a traditional paycheck in the sense that someone is being paid money that they are owed, but payout processes involve money that has already been received by the payer for work already done by the entity being paid. A paycheck is earned based on hours worked, and the payer is obligated to pay the worker for these hours regardless of whether funds have been received for the worker’s efforts.
How Do Payout Processes Work?
Payout processes usually work by bank transfer, but they can involve any type of channel that allows funds to get from one account to another. When a payout is initiated, the request is verified and sent to the payer’s bank.
Once it has been determined that funds are available to cover the request, these funds are then transferred to the payee’s account. Afterward, a receipt is usually generated showing the amount of the payout, the date and other relevant information that may be needed for financial record keeping.
How Are Payouts Made?
Payouts can be made manually, meaning the entity initiating the payout has to actually trigger the transfer of funds, but an automated payout processor may be used as well. An automated payout processor can send funds when an account has accrued a certain dollar amount or when a specific period of time has passed.
Whether a payer chooses to use manual processes or automated processes, another option is to allow the payee to request a payout. This option can also involve automation to alleviate the need for the payer to trigger the payout. Stipulations may still be placed for requesting a payout such as requiring that an account reach a certain dollar amount before a payout request is made.
Read a similar article about marketplace payout here at this page.
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