Open items-list (OP-Liste)

Open items - What are open items? In accounting, open items are receivables or payables that have not yet been cleared. Open items can be, for example, unpaid supplier invoices (creditors) or customer invoices (debtors).

So if such an invoice is entered but is paid later, an open item is created.
The open item is cleared when the invoice is paid.
The sum of all open items is called the "open item balance". In its meaning, this stands for "open item balance".


Open items are also synonymously called OPOS list, oPL or OPL, OPs, OPOS, and OP list.

Meaning of open items

Open items are closely related to the liquidity of a company. An excessive number of open items can lead to payment bottlenecks.
In contrast, the lowest possible number of open items has a fundamentally positive effect on liquidity.


Example: A coffee roasting company always pays its incoming invoices for purchases of raw materials on time. However, when it comes to outgoing invoices, they sometimes lose track of the due dates and only remind overdue payments long after the payment deadline has expired. In the long run, this leads to liquidity bottlenecks.

Handling of open items

Traditionally, open items can be overlooked in the company in different ways:

    • Open item management
    • Open item accounting

Open item management

A copy of each issued invoice is stored in a resubmission folder with compartments for each day. The folder covers a period of one month, and the invoices are filed on the appropriate due date.
The invoices due can now be checked on a daily basis.


With this procedure, no accounting records appear in the accounts on the debtor and creditor accounts. The open items are posted without this "detour".
This procedure is often sufficient, especially for smaller companies.

Open Item Accounting

Open item accounting is a sub-ledger accounting where the "sub-ledger accounts" are entered individually with the respective document totals and document numbers and are cleared upon payment or settlement.
The respective sub-account (vendor account or customer account) always contains only the active items (documents).
The line items are deleted in the account after clearing, but the turnover remains in the account total. From this, it can also be deduced that this is open item accounting (open item system) or ledgerless accounting (ledgerless accounting).


After clearing, the documents are filed in the same order in the Cleared Item Accounting.
A prerequisite for regularity is a chronological document copy storage to fulfill the land register function and the transfer of the daily invoice totals to the customer, vendor, and G/L accounts (general ledger function).
In addition, regular reconciliation of open items with the personal accounts and storage of chronologically ordered document copies of cleared items for ten years.

A well-managed open item list is also important for liquidity

Open items have a direct influence on the liquidity of a company. If one pays its own calculations e.g. always punctually, does not pay however not so strictly on the fact that also the customers do that, this goes debited to liquidity. In principle applies: the fewer open posts, the better the liquidity. If the number of open items increases and nothing is done about it, this can lead to payment bottlenecks and even to insolvency.

 

The constant monitoring and maintenance of the open item list are therefore absolutely necessary for every entrepreneur.
Depending on whether the open items are debit-side (customer receivables) or credit-side (supplier liabilities) business cases, the entrepreneur should pursue different goals:

 

Receivables (debit-side) Liabilities (creditor side)
Comparison of incoming payments with the issued invoices Monitoring of compliance with the granted payment targets
Timely reaction (reminder) in case of non-payment Avoidance of default interest, reminder fees, and other negative consequences, e.g. only delivery against cash payment or cash on delivery
Securing the cash flow and thus the solvency of the company Utilization of cash discount through timely payment