What is best practice on the length of time to leave credit invoices in open payables? How about best practice on the timeframe for invoice processing?


Regarding credit invoices, you do not want to leave credit invoices open for very long.  In optimal circumstances, they should go against the very next invoice from that vendor—assuming that business is still being conducted with that vendor.  If not, a check should be requested for payment of the credit.

In most systems, credits would automatically be offset against invoices, but that probably is a choice that is made when setting up the system. So if that is not currently happening, you need to see how your system is set up.

One of our experts says she worked with credit invoices regularly. “Anything that sat for 90 days or more absolutely meant we would call the vendor for a check. Certainly credit invoices should not sit past year-end, as many organizations (wrongly) take open credits as income or simply wipe them off the books.”

Regarding turnaround times, our 2014 survey (366 organizations) found the median cycle time from receipt of invoice to ready-to-pay is seven days, with the average being 12 days.

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