Canadian Pre-Authorized Debit (PAD) Setup and Processing
Last Modified on 09/16/2026 12:07 pm PDT
Overview
Pre-Authorized Debit (PAD) is a Canadian payment method that allows customers to authorize withdrawals directly from their bank account. PAD payments are different from credit card, eCheck, and U.S. ACH payments:
- PAD bank information is stored at the customer account level.
- PAD payments are not processed automatically through a merchant payment API.
- Billing identifies the invoice as scheduled for payment, but the actual payment is created later through a manually initiated PAD batch.
- PAD processing is normally performed on the 15th of the month.
- The batch amount is based on the account balance at the time the batch is created and the maximum auto pay amount.
- If the financial institution rejects a PAD payment, the payment must be manually reversed.
Navusoft supports one active PAD payment method per account. Adding a new PAD payment method automatically disables other automatic payment methods and inactivates any existing PAD payment method for that account.
Process Flow
Setup
Configuring the system to support Pre-Authorized Debit cards is handled at the Division Level. A system administrator must enable PAD for each applicable division. There is one configuration and one permission that must both be enabled to utilize PAD.
Pathway: Setup > System > Division
To configure PAD
- Open the Setup > System > Division set up screen.
- For each division requiring PAD, click on the division and select the Credit Card / ACH Processing tab.
- Set Enable Pre-Authorized Debit to "Yes". This will cause the Pre-Authorized Debit Export Format field to be displayed.
- Select the Pre-Authorized Debit Export Report format to use for this division.
Permissions
The following permissions is required to create and export PAD batches and to edit selected PAD batch details.
Permission ID |
Permission Name |
491 |
Process and Export Pre-Authorized Debit (PAD) |
Adding a PAD Payment Method
PAD payment methods are managed and added from an account’s wallet similar to making a payment with a credit card or debit card.
PAD payment methods cannot be used for manual payments, contract payments, or work order prepayments.
To make PAD payments, the card must first be added to the wallet.
- Open the customer account and select the AR History icon to open the AR History screen.
- Open Wallet and select Add Payment Method.
- Select Pre-Authorized Debit (PAD) as the payment method Type.
- Enter the required information:
- Name
- Bank/Transit Number
- Account Number
- Verify Account Number
- The system automatically sets these fields:
- Automatic Payment Type set to Scheduled
- Day of Month set to 15
- Enter the Maximum Automatic Payment Amount.
- Optionally enter a Description.
- Click Save to save the payment method in the account's wallet.
When the PAD payment method is saved:
- Other active payment methods with Automatic Payment Type set to At Billing or Scheduled are changed to No.
- Other active PAD payment methods for the account are made inactive.
- The account therefore has only one active PAD payment method.
The Post Payment (wallet icon) is unavailable for PAD payment methods while in the Account Wallet.
Editing a PAD Payment Method
After a PAD is created and saved, certain fields can be modified. From the account wallet, open the existing PAD payment method to make changes.
Pathway: Customer Service > AR History > Wallet
The following fields can be edited:
- Bank/Transit Number
- Account Number - masked by default; click on eye icon to view account number
- Maximum Automatic Payment Amount
- Status - displays Active or Inactive based on the current state
- Description
Note:
- Automatic Payment Type is read-only and remains set to Scheduled.
- Day of Month is not displayed but can be viewed in the Account Wallet.
A PAD payment method can be made Inactive when it should no longer be used. Setting it to inactive does not create a replacement payment method or process a payment.
Customer Portal
Pre-Authorized Debit (PAD) cards are visible in the customer portal but due to the very nature of using PAD setup, there are no actions that can be taken by the customer to alter it or set it up.
Payment methods
PAD payment methods are not displayed in Customer Portal Make a Payment or Invoice Quick Pay options. Payment Terms messaging is used to notify customers on how to sign up for PAD.
Wallet
PAD payment methods are displayed in the Customer Portal but a customer can not add a new PAD card or edit/remove/deactivate an existing PAD card. Customers will need to contact customer service to change to or disable PAD.
Creating a PAD Batch
Pre-Authorized Debit payments are not processed during a billing run. A billing administrator must create, export, and process a separate PAD batch.
PAD Batch Eligibility
A PAD payment batch includes accounts that meet all of the following criteria:
- Match the selected division, account class, and bill group.
- Have an active PAD payment method type.
- Have a balance greater than zero.
PAD payment methods are excluded from scheduled payment processing because they are handled through the manually created PAD batch.
Create a PAD Batch
Pathway: Accounting > AR Payment Batch
- Open the Accounting > AR Payment Batch List screen.
- Select the green + icon in the lower right corner .
- On the Create Pre-authorized Debit Batch screen. enter the batch criteria:
- Division - required and limited to the divisions available to the user.
- Account Class — optional.
- Bill Group — optional and limited by division. Bill groups with no division can still be selected when applicable.
- Date — required; defaults to today's date.
- Period — populated automatically based on the date selected.
- Bank Account — required.
- Note — optional.
- Select Process.
PAD Batch Processing and Payment Application
Keep the following considerations in mind:
- The batch uses the account balance when the batch is created, not necessarily the balance shown during the original billing run.
- Accounts with no balance are excluded.
- If an Account balance exceeds the payment method's Maximum Automatic Payment Amount, the account is charged only up to that limit.
- PAD batches are posted immediately
- PAD batches cannot be un-posted
- PAD batches are excluded from standard scheduled payment processing.
After processing is complete, the creation dialog closes and the Batch Detail window opens with the new batch listed.
Pathway: Accounting > AR Payment Batch > Batch details
For each qualifying account:
- The payment amount is the lesser of the account balance and the payment method’s Maximum Automatic Payment Amount.
- The payment is applied automatically to the account’s open items.
- The payment batch is posted immediately.
In the above example, one account met the criteria for this PAD batch. The account had a balance of $312.93 but its Maximum Automatic Payment Amount was set at $123.00 in the Account Wallet. As a result, $123.00 was charged and applied to the account
Billing
The final payment amount is not fixed during billing because the account balance may change before the PAD batch is created.
During billing, an account with an active scheduled PAD payment method is marked as being scheduled for payment.
The invoice submission serves as communication of the variable amount that is expected to be withdrawn. There are a couple of indicators on an invoice that a PAD payment is involved depending on the timing of the invoice.
Exporting a PAD Batch
An exported PAD Batch file must be delivered to the financial institution for processing. Posting the batch relieves accounts receivable in the application; it does not confirm that the bank successfully processed every withdrawal.
Export a PAD Batch
Pathway: Accounting > AR Payment Batch
From the AR Payment Batch Detail window:
- Confirm the batch details.
- Select Export Pre-authorized Debit.
- Save or send the generated export file according to your organization’s bank-processing procedures.
The export can be generated multiple times if the original file is lost or needs to be resent.
PAD Batch Status and Permissions
Keep the following considerations in mind:
- PAD batches cannot be un-posted.
- The Bank Account, Source, and Note fields can be edited.
- The batch displays the PAD-specific batch source.
- The appropriate permission is required to export a PAD batch.
- Posting a batch does not confirm that all withdrawals were successfully processed by the financial institution.
Rejected or Returned PAD Payments
PAD payments are initially assumed to be successful when the batch is posted. If a financial institution rejects or returns a payment:
- Identify the rejected customer payment.
- Manually reverse the payment in the application.
- Follow your organization’s standard customer communication and collection procedures.
The system does not automatically reverse rejected PAD payments through the merchant payment API.
Related Articles
Accounts - Add Payment Method / Make Payment Method Inactive
