Invoice run
The concentrated processing of outgoing or incoming invoices is referred to as an invoice run . Depending on the size of the company or the facility, billing runs are usually carried out at intervals from daily to monthly. During an invoice run, all invoices for a specific invoice period are usually processed.
There is a similar procedure for dunning notices , here one speaks of dunning runs .
Process in accounts payable
Incoming invoices are continuously recorded and assigned to accounts in the accounts payable department . However, before these are settled ("paid"), they go through a defined internal processing. These are checked for mathematical correctness in accounting and for factual correctness in the responsible departments. It is also assigned to the date of an invoice run that enables punctual payment according to the due date of the invoice.
During the billing run, the bills that have been processed and due up to this point are collected and prepared for (now almost exclusively cashless) payment and presented to management or an authorized officer for instruction.
A typical example of accounts payable invoice runs on fixed dates are monthly wage or salary payments.
Process in accounts receivable
In the accounts receivable department , outgoing invoices are created for services rendered (deliveries or services). The services performed are usually continuously recorded and provided with amounts of money according to the price list or the offer . These are added up and any taxes or other charges to be levied are added. These are invoiced and sent to the debtors on fixed dates (the invoice runs) .
The most common examples of accounts receivable billing runs include monthly phone bills or annual bills for living expenses .
Advantages and disadvantages of periodic billing runs
The concentrated processing of incoming or outgoing invoices primarily serves to increase efficiency in accounting and reduce costs. Through the collective processing, individual invoices can be combined and paid or sent as a collective invoice. As this results in fewer account movements, fewer bookings have to be reconciled with payments. Banks often charge fees per booking for business accounts, which also minimizes these costs.
Internal processes can also be made more efficient: the responsible departments know the dates by which they must have checked incoming invoices for factual accuracy and can plan this accordingly in their work processes. The collective instruction of the invoices by the managing director or authorized signatory also enables greater work efficiency.
On the other hand, it has a disadvantage (especially for suppliers and service providers) that invoices are usually only settled on the due date due to their inclusion in the last possible invoice run date, or fees are only paid on certain dates (e.g. every fortnight or even monthly) regardless of the invoicing.
See also
literature
- Albert Karer: Optimal process organization in IT management: a process reference model for practice . Springer, 2008. ISBN 978-354071557-3
- Iris Thomsen (Ed.): Bookkeeping Basics . Haufe Verlag, 2009. ISBN 978-344809357-5
