Definition: Batch processing is the bookkeeping or accounting practice of accumulated multiple source documents like employee time sheets and processing them all at once each day, week, or month. In other words, bookkeepers that use batch processing wait to record or input information into the accounting system until several different documents can be input.
For example, bookkeepers tend to input employee time sheets or time cards in a batch. All employees’ time cards are collected and processed together. This saves time and is much more efficient than processing each time sheet individually. Bookkeepers also tend to use batch processing for depositing checks, entering bank statements, and mailing bills.
All of these processes are more efficient to process in batches. It doesn’t make sense to record and deposit one check at a time. Instead, bookkeeps wait until multiple checks are available to process and deposit at once.
What Does Batch Processing Mean?
Although batch processing is efficient and in some ways is easy to perform, it does have disadvantages. Depending on the source documents, bookkeepers can wait up to a month for documents to accumulate before processing a batch of documents. This means that the resulting information is already a month old on the day it is recorded. Assets like inventory are bought and sold regularly.
Purchasing managers can’t wait a week or a month for inventory reports to be processed. That is why most companies have moved to online processing for inventory and other operating activities. Online processing costs more than batch processing, but it gives managers the ability to process data and generate reports instantly.