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In an effort to save the time wasted while switching from one task to another, many businesses batch various processes, lumping together the similar processes to do all at once. In batching customer invoices, you would process several customer invoices all at the same time. Similarly, when it comes time to pay bills, you might batch all of the invoices you received from suppliers together and pay all the invoices at once.
Several Forms of Batching
The basics of batching are the same, simply doing the same task repetitively rather than switching from one task to the next. Batching saves time, and work flows more easily, as it is a sort of assembly line process. When it comes to accounting, and batching customer invoices in particular, there are two distinct types. The first type occurs when sending invoices and the second occurs when receiving payments on an invoice you have sent.
Batching Invoices to Be Sent
Batching invoices to be sent can be as simple as creating the invoices in your software program and then clicking the "to be printed" check-box. Once you have created all of the invoices, you can print them or even email them all at once. Another form of batching allows you to create multiple invoices at the same time if it is for the same service but for multiple customers. Large companies may batch print all invoices in a separate print job that runs at night.
Batching Invoices Received
The other form of batching is handling multiple invoices that a company receives in perhaps a given day and processing them all together as one deposit transaction. Each payer is credited for his portion, but for accounting purposes, the invoices are added together, and a single accounting entry is made for the total amount, rather processing than the individual amounts.
Is Batching Invoices Preferable?
Holding customer invoices for several days until you get a big pile and then processing and sending them out all in one batch can be a mistake for a small business because it can delay your cash flow unnecessarily and put a strain on your budget. However, this isn't as much of a problem for a large company because the volume of customer invoices would be larger so the delay would be shorter.
Tim McMahon began publishing the "Moore Inflation Predictor" and "Financial Trend Forecaster" newsletter in 1995 and has published it every month since. He is also the editor of InflationData.com and the author of "Healthy Tongue Secrets," a book on dealing with problems like thrush and geographic tongue. He holds a Bachelor of Science in engineering management from Clarkson University.