A system of accounting (also called batch-based entry) where multiple items (source documents), after accumulation, are transferred from journal, to ledger, and then to financial statements in a linear order. In this system, transactions are grouped and processed at the level of a subledger where entries are accumulated (through a process called “posting“) rather than transferred immediately to an entity’s general ledger. Thereafter, reporting for period-end results will be conducted.
An entity using batch system can review data entry work prior to posting to the books of account, for out of balance errors, usually system-based, while manually spotting and fixing any errors in the batch. Since the multi-step process (batching and review) allows for peer review before moving on to the posting stage, the batch system is instrumental to set-up internal controls.
An example is accumulation of source documents (e.g., time sheets) and processing them in the accounting system all in one group daily, weekly, or monthly.
Batch-based accounting (also, batch accounting or batch processing) is typically set against an opposite concept known as real-time accounting or instant accounting.
