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How to Manage Continental and Anglo-Saxon Accounting in Odoo 15

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How to Manage Continental and Anglo-Saxon Accounting in Odoo 15

  1. 1. Odoo 15 Anglo Saxon & Continental Accounting in Odoo 15 www.cybrosys.com
  2. 2. INTRODUCTION  The two main types of accounting practiced widely are the continental accounting and anglo saxon accounting.  Continental type of accounting is the most used type of accounting, Anglo saxon type on the other hand is mainly used by the small communities.  By default the Odoo uses continental type of accounting. You can enable the anglo saxon type of accounting from the Accounting module settings.  The continental type of accounting the amount of the goods is recorded as soon as the product is received in the stock, where on the other hand in an anglo saxon type of accounting the cost of the goods is recorded at the time of sale or delivery.
  3. 3.  To switch to anglo saxon type of accounting, first select the Settings option from the Configuration tab of the Accounting module. Under the Accounting menu you can enable Anglo saxon Accounting. By saving the changes, your further accounting will be executed in the anglo saxon type.  In Continental type of accounting the cost of goods and services is taken into account when the product is received in the stock. In the case of Anglo Saxon type of accounting the cost is recorded as expense only when the goods is invoiced to a final customer.
  4. 4. Accounting -> Settings -> Setup
  5. 5.  The accounting entries to value the inventory are not posted automatically when a product enters or leaves the company. Moreover, while creating a new customer the payable account is ‘Account payable’ and the receivable account is ‘Account receivable’ for understanding the flow of journal entries  when you purchase a product for a certain amount, the money you have to pay is affected in this account. Manual Inventory Valuation
  6. 6.  Here the Accounts Payable can be described as the payable account for the vendor,
  7. 7.  The accounts receivable over here can be defined as the receivable account of the customer.
  8. 8.  Product -> Select a Product -> Product Category
  9. 9.  Here is the Income account: When a product is sold, the Revenue will be used to record the transaction based on the sale price, used while validating a customer invoice.
  10. 10.  In the expense account, the expense is accounted for when a vendor bill is processed here, it is set as Purchased Goods.
  11. 11.  An accounting entry is automatically created to value the inventory when a product enters or leaves the company.  Moreover, the same product is considered with its inventory valuation as ‘Automated’ and selects the corresponding accounts for each movement. Now set a vendor for the product and the price of that product for which the vendor is selling. Automatic Inventory Valuation
  12. 12.  Product -> Select a Product -> Product Category
  13. 13. Stock Valuation Account: When a real-time inventory valuation is enabled on a product, this account inventory will hold the current value of the product. Supplier Invoice Validation purchasing a product from a vendor and its actual price is 45/-, in this case, I have received the bill first, but the product is not received yet. Then the ‘Expense’ ie, the Expense Account and the account payable is affected.
  14. 14.  The balance sheet is also affected with the same change
  15. 15.  Done payment against my order and you can see that the Bank account is affected.  Receive the product and will generate an entry for the Inventory ie the stock valuation account.
  16. 16.  purchasing a product from a vendor and its actual price is 45/-, but before paying the amount, the product is received. Then the stock valuation account and the stock input account is affected with corresponding entries.  the changes can also be viewed in the balance sheet of the platform  while receiving the bill against the purchase, then the Accounts payable and Purchase expense are affected by the purchase order Supplier Goods Reception
  17. 17.  The similar effect can be seen in the balance sheet
  18. 18.  Selling this product to my customer and I have given the bill for the order. Then while processing it, the ‘Goods’ ie, income and the ’Account Receivable’ account is affected with an entry. Customer Invoice
  19. 19.  Similar implications can be seen in the balance sheet also
  20. 20.  Now when the customer has paid the amount for the corresponding order then ‘Bank’ is affected with the payment  delivered the product, it will generate an entry for the ‘Inventory’ i.e. the stock valuation account
  21. 21. Anglo-Saxon Accounting Set the accounting configuration as Anglo-Saxon accounting. Accounting module > Settings > Bank & Cash > tick the Anglo-Saxon accounting > save.
  22. 22. Manual Inventory Valuation  Set the Products Property accounts for implementing Anglo Saxon with a manual inventory valuation.
  23. 23.  The Income account is used when a product is sold, the Goods will be used to record the transaction based on the sale price, used while validating a customer invoice.  The Expense account when a vendor bill is processed, in Anglo-Saxon with perpetual inventory valuation in which case the expense is recognized at customer invoice validation
  24. 24. Supplier Invoice Validation  purchasing a product from a vendor and its actual price is 45/-, in this case, I have received the bill first but the product is not received yet. Then the accounts affected will be the Cost of Goods Sold and Account Payable with an entry. Supplier goods reception  In this action, no journal entries are being added.
  25. 25. Customer Invoice  Selling a product to customer and have given the bill for the order. Then while processing it, the accounts Goods and Account Receivable are affected with an entry. Customer Shipping  During this action no entries are being posted.
  26. 26. Automatic Inventory Valuation change the product category to ‘Automated’
  27. 27. Supplier Invoice Validation  A Request for Quotation (RFQ) is used when you plan to purchase some products and you would like to receive a quote for those products. purchasing a product from a vendor and its actual price is 45/-, but the bill for the order is received first.
  28. 28.  In the Purchases -> Create Request for quotation -> add Products
  29. 29.  The Stock Input account and the Accounts Payable accounts are affected with an entry for the corresponding order  While paying the amount against the bill the Bank account is affected.
  30. 30. ❖ Supplier Goods Reception ⤍ Then we have purchased a product from the vendor but the product is received first before paying the amount. Then the Stock valuation account i.e.,’ Inventory’, and the Stock input account i.e. here ‘Goods received not purchased’ is affected with corresponding entries as depicted in the following image.
  31. 31. ❖ Additionally, when the supplier gives the bill, then the Accounts payable is affected by the corresponding purchase.
  32. 32. ❖ After receiving the bill and doing the payment it is affected in the Bank account
  33. 33. ❖ Anglo-Saxon based on Price Difference. ➢ Here, purchasing a product from a vendor but the product is received first before paying the amount.
  34. 34. ❖ Additionally, the actual price of the product is 505/- and here the price of the product is changed in the bill received from the supplier as 510/-. Therefore, the difference in the price of the product is added to the ‘Price Difference’ account as depicted.
  35. 35. ❖ In addition, this is reflected in the profit and loss report as it is the summary of income and expense, in which the price difference is calculated as the difference of the actual cost of the product and the cost of product while billing.
  36. 36.  When the same product to my customer and I have delivered the product before receiving the payment. Now the Stock output account ie, ‘Goods Issued Not Invoiced’ and the Stock valuation account ie, ‘Inventory’ is being affected with the order as depicted.  Then given the bill against the order then the Accounts receivable is affected.  In addition, while receiving the payment, it is affected in the Bank account. ❖ Customer Shipping
  37. 37.  When selling the same product to my customer and I have sent an invoice for the order.Then the ‘Goods issued not invoiced’ ie, the stock output account and the ‘Accounts Receivable’ accounts are affected with an entry.  If the customer paid the corresponding amount then the payment is affected in the ‘Bank’ account. As the Anglo-Saxon will take the cost when a sales invoice is created, the income and expense accounts are affected i.e., ‘Goods’ & ‘Cost of Goods Sold’, Customer Invoice
  38. 38. For More Details Check our company website for related blogs and Odoo book. Odoo Book V15 Check our YouTube channel for functional and technical videos in Odoo. Odoo 15 Anglo Saxon and Continental Accounting
  39. 39. Thank You

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