Batch processing is the processing of data on a delayed basis. This approach is commonly used when the following issues are present:
- Timeliness. There is no immediate need for the information, so it is reasonable to delay the processing.
- Efficiency. There is an increased cost associated with immediately processing the data, or it is possible to increase the efficiency of operations by delaying processing.
For example, batch processing may be a reasonable alternative in accounting when there are a large number of transactions in the sales journal; in this case, they may be aggregated and posted to the general ledger only at long intervals, such as once a month. Similarly, the payroll clerk may choose to enter all employee timecards in a batch. By doing so, she can remain in the timekeeping data entry module in the accounting system, which is configured for the most efficient data entry of timecard information.
Though batch processing may seem like the most efficient approach, it can lead to incorrect results. For example, if the warehouse clerk were to wait a few days for inventory transaction documents to pile up before entering them in a batch, the outcome would be inventory records that contain incorrect unit quantities until the time when the documents are fully entered. Since merchandising, shipping, and production activities all rely on accurate inventory records, the effects of using batch processing would be harmful to these operations.