> ## Documentation Index
> Fetch the complete documentation index at: https://help.trykarat.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Redirecting incoming invoice funds

> Automatically send invoice payments to other recipients as payouts

When you create an invoice, you can choose to automatically redirect some or all of the incoming payment to other recipients as payouts. This is useful when you collect funds on behalf of contractors, partners, or talent and need to pay them out as soon as the invoice is paid: without manually creating a payout batch each time.

## How redirected funds work

1. While creating an invoice, you enable **Redirect incoming funds** on the Payment details step and add one or more recipients with amounts.
2. The invoice is sent to your customer as normal.
3. When the invoice is paid into your destination Karat Banking account, Karat automatically creates a payout batch for the redirect recipients you configured.
4. If you mark the invoice as paid manually, the redirect payouts are also triggered at that time.
5. You can track the resulting payouts from **Banking > Payouts**.

Redirect payouts go to recipients in your existing payouts recipient list, so they follow the same payout rules, holding periods, and notifications as any other payout you create.

## Configuring redirect payouts

1. **Open the Payment details step.** Start an invoice from **Banking > Invoices > Create Invoice** and complete the Recipient information, Invoice details, and Payment terms steps.
2. **Choose a destination account.** On the Payment details screen, select the Karat Banking account that should receive the invoice payment. Your primary checking account is selected by default.
3. **Turn on Redirect incoming funds.** Toggle **Redirect incoming funds** on. A table appears for you to add redirect recipients.
4. **Add redirect recipients.** For each row, choose:

   * **Recipient**: search your existing payout recipients, or add a new one.
   * **Description**: an optional memo that appears on the payout (for example, the project name).
   * **Amount**: the dollar amount to send to that recipient.

   Click **Add recipient** to add more rows. Click the trash icon to remove a row.

   The combined amount across all redirect recipients cannot exceed the invoice total. Any remainder stays in your destination account.
5. **Continue and send.** Click **Continue**, review everything on the Review and send screen, then create or send the invoice.

## Triggering payouts when an invoice is marked as paid

If a payment arrives outside of automatic reconciliation (for example, a check or a wire that wasn't matched automatically), you can still trigger the redirect payouts by marking the invoice as paid:

1. Go to **Banking > Invoices** and open the invoice.
2. Click **Mark as paid**.

Karat updates the invoice status and creates a payout batch for any redirect recipients you configured when the invoice was created. If no redirects were configured, the invoice is simply marked as paid.

## Tips

* Add redirect recipients to your payouts recipient list before creating the invoice so they appear in the search.
* Use the Description field to make the payout easier to recognize on the recipient's end.
* Review the redirect total against the invoice total on the Review and send screen to confirm the split is what you expect.

*<sub>Karat is a fintech company, not an FDIC-insured bank. Banking and Card services provided by Grasshopper Bank, N.A., First Internet Bank of Indiana, and Cross River Bank, Members FDIC.</sub>*