Open Item Accounting
Also: OP-Verwaltung · Offene-Posten-Buchhaltung · OPOS
Open item accounting is the bookkeeping method that tracks every not-yet-settled receivable and payable individually, per business partner, as an "open item". An item stays open until invoice and payment have been matched and cleared against each other.
Open item accounting is the financial-accounting method a company uses to track every not-yet-settled invoice individually. Each outgoing invoice to a customer and each incoming invoice from a supplier is carried as its own "open item" on the relevant subsidiary-ledger account and stays open until a payment can be assigned to it unambiguously and the item is thereby cleared. Open item accounting therefore answers, at any time, the question: which amounts do customers still owe us, and which amounts do we still owe suppliers?
Technically, open item accounting is a form of current-account or subsidiary-ledger bookkeeping. Instead of merely adding up balances, it holds every single document with its document number, amount, due date and status. Only once a receivable and an incoming payment - or a payable and an outgoing payment - have been offset ("cleared") does the item drop off the list of open items. The sum of all open accounts-receivable items equals trade receivables, and the sum of all open accounts-payable items equals the corresponding trade payables.
At a glance
- Tracks each unpaid invoice individually as an "open item" rather than just as a balance
- Applies equally to accounts receivable (customers) and accounts payable (suppliers)
- An item is settled by matching payment and invoice ("clearing")
- The basis for dunning, payment forecasting and liquidity planning
- Foundation of the open item list, i.e. the ageing analysis of receivables
How does open item accounting work?
An open item arises with every posting to a subsidiary-ledger account that initially stays unpaid. When an outgoing invoice is posted, accounting creates an open item on the accounts-receivable account for the gross amount. Only when the customer pays is the incoming payment offset against exactly this item. This is called clearing: invoice and payment receive the same assignment, the item counts as settled and no longer appears in the list of open items.
The appeal of the method lies in traceability at document level. Unlike pure balance-based bookkeeping, which knows only the overall status of an account, open item accounting knows exactly which individual invoice is still outstanding, since when it has been due and whether a partial payment was made. This is the prerequisite for targeted dunning, correct calculation of early-payment discounts and assessing the payment behaviour of individual business partners.
Clearing and partial payments
Clearing assigns a payment amount to one or more open items. If a customer settles several invoices with one bank transfer, accounting distributes the payment across the affected items. With a partial payment a residual item stays open; the system reduces the outstanding amount accordingly. Where differences arise - for example through deducted early-payment discount, rounding or complaints - these are resolved via discount or difference postings so that the item runs cleanly down to zero.
The open item list
The central reporting instrument is the open item list. For a given reference date it shows all not-yet-cleared items per customer or supplier, with amount, document date and due date. Supplemented by an ageing analysis - broken down by days overdue - it becomes an early-warning system for payment defaults and the basis for short-term liquidity planning.
Why open item accounting matters
Open items tie up capital. A posted receivable is not yet money in the bank - only the incoming payment brings liquidity. Open item accounting makes this difference transparent: it shows how much money is tied up in circulation, which receivables are overdue and when receipts can be expected. This makes it the backbone of accounts-receivable management and liquidity control.
On the accounts-payable side, the same method provides the basis for payment scheduling: which supplier invoices are due, where can an early-payment discount be taken, which payments can be timed without breaching deadlines? Without reliable open items, neither a functioning dunning process nor a credible cash-flow forecast is possible. Metrics such as Days Sales Outstanding feed directly off the data in open item accounting.
Open item accounting in the ERP system
In an ERP system or inventory management software, open items arise automatically from the document flow. As soon as an outgoing invoice is generated from an order and posted, the system creates the open item on the accounts-receivable account; incoming supplier invoices create accounts-payable items accordingly. The item carries a document number, amount, payment terms and discount data and is linked via the customer or supplier number to the customer or supplier master data.
The real added value comes from payment matching. Via the electronic bank statement (CAMT/MT940) the system tries to assign incoming payments to the matching open items automatically - for example based on invoice number, amount and payment reference. Cleared items drop off the open item list, overdue items trigger the next dunning run. Many systems handle open item accounting themselves; others pass the postings via an interface, for example in DATEV format, to an external financial accounting system, where the payment matching then takes place.
Distinction: open items vs. balance-based bookkeeping
Open item accounting must be distinguished from pure balance-based bookkeeping. Balance-based bookkeeping knows only the overall balance of an account: it states that a customer owes 5,000 euros in total, but not which individual invoices make up that amount. Open item accounting, by contrast, holds every document individually and knows which specific invoice is open - the indispensable basis for document-level dunning and clearing.
Equally important is the distinction from dunning and receivables management: these build on open items but are not identical to them. Open item accounting provides the data basis - which item has been due since when - while dunning derives the action from it. Nor is the open item itself to be equated with the customer account: the customer account is the account or customer, while the open item is the individual unpaid document on that account.
DACH specifics and compliance
In the German-speaking region, open item accounting is closely tied to the common charts of accounts and to DATEV practice. Accounts-receivable and accounts-payable items are kept on subsidiary-ledger accounts in dedicated number ranges and can be handed over, together with their payment information, to tax advisors and DATEV. The open item is thus the interface between the operational document flow in the ERP and tax-relevant bookkeeping.
Open items and their documents are subject to the GoBD: postings must be traceable, complete and unalterable, and payment assignments must be documented in an audit-proof manner. At year-end, open items must be valued - doubtful receivables are subject to individual valuation allowances, uncollectible ones are written off as a receivables loss, and the VAT is corrected accordingly. Clean open item accounting therefore satisfies commercial as well as accounting and tax requirements at the same time.
Example
Open items in everyday trade
A mid-sized B2B distributor issues a customer three invoices for 2,000, 3,500 and 1,200 euros, each with 14-day payment terms. Three open items arise on the accounts-receivable account in the ERP. After ten days the customer transfers 5,500 euros, quoting the first two invoice numbers as the payment reference. The automatic bank-statement matching clears the 2,000 and 3,500 euro items - they disappear from the open item list.
The third item for 1,200 euros stays open. Once the deadline passes, the ageing analysis flags it as overdue; the configured dunning run automatically generates the first reminder. In parallel, the open item list tells controlling that 1,200 euros of expected liquidity is still outstanding - a figure that feeds directly into the cash-flow forecast.
Frequently asked questions
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