What are open transactions?

open transactions are any type of financial activities that are not completely settled at the end of the specified accounting period. Business transactions of this type remain open until they finally satisfy. Since many types of companies work with a process that creates excellent transactions that can remain disturbed for several weeks or even longer, most accounting systems provide some means of monitoring the outflow and flow in open transactions within the collection process and maintaining steps over what type of reception can be generated in one or more.

One of the simplest ways to understand open transactions is to consider the purchase of goods or services from a company in which the debt is not settled immediately, when the buyer offers cash payment at the time of purchase. In this type of setting, the seller usually issues an invoice to the buyer, which then has a certain number of calend payments in which it is necessary to fill ina full payment. Assuming the transaction occurs in the middle of the accounting month and the terms of payment are 30 days, the buyer cannot pay the payment in this current accounting month. If this is the case, the transaction is identified as open or excellent when this accounting month is closed.

almost any business that does not rely on immediate payments for goods or services will have open transactions that must be posted in records with the company's accounting. The aging process helps keep up with the state of these open transactions and provides the opportunity to determine whether a particular transaction will remain open after an unusual period of time. For example, if aging on a particular invoice is now 45 days and that the customer usually pays in 28 to 30 days, the company can start contact with the customer to make sure the voice is taken. From this point of view it makes it easier to monitor the state of the open TransBy managing the efforts to collect and correct supervision or other problems that can delay the receiving of payments from customers.

Administration of the higher transactions is very important for the financial stability of any business. In order to ensure that sufficient income is permanently accepted to recognize the company's debts, businesses often provide billing processes to provide customers with enough opportunities for payments as soon as possible. Something as simple as knowing what days of the month the customer reserves to reduce the checks for outstanding invoices and the timing of the invoice to this customer can help shorten the turnover between invoice and receiving payments, which also helps maintain the number and cash value of open transactions to an acceptable extent.