What is an open invoice? How to close outstanding invoices.
Invoicing is an integral part of any business. Learn more about what open invoices mean in your business, as well as the typical payment processing flow you can expect when invoicing clients.
Part of doing business as an independent contractor or small business owner is sending payment requests to your clients. Learn more about what happens after you send an invoice, and what it takes for those invoices to go from open to closed.
Learn about open invoices.
An invoice is an official request for payment in exchange for your services. Open invoices, also known as outstanding invoices, are invoices that have been sent to the client but have yet to be paid.
Why are they important? Keeping track of open invoices helps you monitor your business's cash flow, as well as show you which clients still owe you payment.
Payment processing made easy.
When you send an invoice to a company, it’s typically forwarded to the accounting department or accounts payable department who are responsible for examining the invoice and processing payment. If there’s a problem with your invoice, such as a missing invoice number or certain line items, your invoice could be sent back to you for reissue.
How frequently your invoices are paid depends on the company you’re working with and your contract agreement. Some can take anywhere from 30-90 days to process payments, whereas others may process payments immediately. Once the department has successfully processed your payment, the invoice will be marked as paid and from then on referred to as a "closed invoice."