What Is a Payment Date?

Payment dates are associated with many different types of financial transactions. In general, a payment date is the specific date that some sort of payment is scheduled to be received by an investor, vendor, or creditor. Depending on the specific type of transaction involved, the payment date may be known by some other name.

With stock dividends, the date of payment refers to the specific date that the holder of record is scheduled to receive the dividend payment. In this application, the date may be referred to as the payable date. The purchase date associated with the shares will have some influence on when this payment date is set. For example, any investors who purchased the shares prior to the ex-dividend date may or may not have the same payable date as investors who have owned shares for the entire period used to calculate the dividend payments.

A different type of payment date is associated with investments like bonds and mutual funds. With these types of investments, the date is often referred to as a distribution date. The date identifies either the date that the interest payment is to be made or the actual date that the payment is issued, if there is some type of delay in the original projection.

In general business settings, the payment date is the date that a seller receives payment from a buyer for an outstanding invoice. Here, the date of payment is not necessarily the same as the due date included in the invoice detail. Only if the buyer remits payment and it is received on the exact due date do the two dates mirror one another. In most cases, the date of payment on an outstanding invoice will either occur prior to or sometime after the due date. The date may also be different from the record date, which refers to the actual date that the payment is posted in the vendor’s accounting records.

While different terms are used to identify a date for payment, they are not necessarily exclusive to specific situations. For example, when identifying the date as it relates to the payment of dividends on stock holdings, the issuer may refer to the date as a distribution date, a payable date, or simply a payment date. In like manner, payments to holders of bond issues may find the date identified as a distribution date, a disbursal date, or a date of payment. Often, the choice of term is influenced by local culture. In any event, the choice of terms is usually included in the provisions that apply to the transaction involved, and can be readily understood by all parties involved.