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By: Kavya Raveendran

Odoo Continental vs Anglo-Saxon Accounting

There are mainly two types of accounting practice that is widely adopted across the globe. Everyone is familiar with continental accounting as this is one of the widely adopted accounting features among the crowd.  Anglo Saxon accounting, on the other hand, is used by a small community say the preferable only.

Anglo-Saxon V/s Continental In Odoo
Anglo Saxon is only available in Enterprise Edition of Odoo while the Continental is available in both the Enterprise and Community Edition of Odoo (in version 12.0).

In Continental Accounting, the expense account is affected at the time of purchase, on the other hand, in Anglo Saxon Accounting the expense account is affected at the time of processing a sales order.

Continental Accounting
In accounting,  inventory can be validated Manually or Automatically. While doing manually the stock is not affected, therefore it will be manually added/calculated at the end of a month or at the end of an year.

For implementing the continental accounting, go to the  Settings of Accounting, UnTick the checkbox (If ticked, by default it will be continental) Anglo-Saxon Accounting and save changes.

Accounting -> Settings -> Setup 

continental and anglo saxon accounting odoo-1

Now let's see how this is applied in.

1. Manual inventory valuation
The accounting entries to value the inventory are not posted automatically when a product enters or leaves the company. Create a new customer and here his payable account is ‘Account payable’ and the receivable account is ‘Account receivable’ for understanding the flow of journal entries.


continental and anglo saxon accounting odoo-2

Here the Accounts Payable: The payable account for the vendor, When you purchase a product for a certain amount, the money you have to pay is affected in this account.

continental and anglo saxon accounting odoo-3

Accounts Receivable: The receivable account of the customer. When you sell a product for a certain amount, the money you have to receive is affected in this account.

continental and anglo saxon accounting odoo-4


Now create a product with the inventory valuation as ‘Manual’ and then select the corresponding accounts for each movement as shown in the image. Now set a vendor for the product and the price of that product for which the vendor is selling.

Product -> Jio wifi Router -> Product Category

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Here 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.

continental and anglo saxon accounting odoo-6

Expense account: The expense is accounted when a vendor bill is processed here, it is set as Purchased Goods.

continental and anglo saxon accounting odoo-7

While doing a purchase or sales,  there occur some actions. Consider the following and understand how the accounting entries are posted in those actions.

Action 1: Supplier Invoice validation (While purchasing a product the bill against the order is received)
I am purchasing a ’Jio wifi router’ 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 Purchased Goods and Account Payable with an entry.

continental and anglo saxon accounting odoo-8

Action 2: Supplier Goods Reception (The ordered product has been received)
In this action, no journal entries are being added. 

Action 3: Customer Invoicing  (The payment for a corresponding sales order is received)
Now suppose am selling this product to my customer and I have given the bill for the order. Then while processing, it is the accounts Revenue and Account Receivable that is affected with an entry.

continental and anglo saxon accounting odoo-9

Action 4: Customer Shipping (When the product is delivered) During this action,  no entries are being posted.

2. Automatic Inventory Valuation: 
An accounting entry is automatically created to value the inventory when a product enters or leaves the company.

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. Now the product’s category is changed as shown in the image. 

Product -> Jio wifi Router -> Product Category 

continental and anglo saxon accounting odoo-10

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.

Consider the following operations and how the accounting entries are posted in those actions

Action 1: Supplier Invoice validation (While purchasing a product the bill against the order is received)
I am purchasing a ’Jio wifi router’ 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 ‘Purchase Expense’ ie, the Expense Account and the account payable is affected.


continental and anglo saxon accounting odoo-11

continental and anglo saxon accounting odoo-12

Following next, I have done payment against my order and you can see that the ‘Bank’ account is affected.

continental and anglo saxon accounting odoo-13

Now I receive the product and will generate an entry for the ‘Inventory’ ie the stock valuation account and ‘Inventory Variations’.

continental and anglo saxon accounting odoo-14

continental and anglo saxon accounting odoo-15

Based on this scenario while receiving a bill from the supplier, the accounting entries may look like this.

continental and anglo saxon accounting odoo-16

Action 2: Supplier Goods Reception (The ordered product has been received)
I am purchasing a ’Jio wifi router’ from a vendor and its actual price is 45/-, but before paying the amount,  the product is received. Then the stock valuation account ie,’Inventory’ and the stock input account ie, ‘Inventory variations’ is affected with corresponding entries.


continental and anglo saxon accounting odoo-17

continental and anglo saxon accounting odoo-18

While receiving the bill against the purchase, then the Accounts payable and Purchase expense is affected by the purchase order.

continental and anglo saxon accounting odoo-19

continental and anglo saxon accounting odoo-20

After that I gave the payment to the vendor for the corresponding purchase order, then it is affected in the Bank account.

continental and anglo saxon accounting odoo-21

Based on this scenario while receiving a product the accounting entries may look like this.

continental and anglo saxon accounting odoo-22

Action 3: Customer Invoice.
Now suppose am 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.

continental and anglo saxon accounting odoo-23

continental and anglo saxon accounting odoo-24


Then the customer has paid the amount for the corresponding order then ‘Bank’ is affected with the payment. 

continental and anglo saxon accounting odoo-25

Now I have delivered the product, it will generate an entry for the ‘Inventory’ ie the stock valuation account and ‘Inventory variations’.

continental and anglo saxon accounting odoo-26

continental and anglo saxon accounting odoo-27

Based on this scenario while invoicing the accounting entries may look like this.

continental and anglo saxon accounting odoo-28


Action 4: Customer Shipping.
I am selling this product to my customer and I have delivered him the product. Now the ‘Inventory Variation’ and the Stock valuation account ie, ‘Inventory’ is being affected with the order.

continental and anglo saxon accounting odoo-29

continental and anglo saxon accounting odoo-30

Then I have given the bill regarding the order then the Accounts receivable and the ‘Goods ‘income account is affected.

continental and anglo saxon accounting odoo-31

continental and anglo saxon accounting odoo-32

Then when the customer pays for the corresponding bill it is affected in the Bank account.

continental and anglo saxon accounting odoo-33

Based on this scenario while shipping a product the accounting entries may look like this.

continental and anglo saxon accounting odoo-34

Anglo-Saxon Accounting 
For differentiating both the accounting features here am considering the same scenario, let's see how it is being implemented. Set the accounting configuration as Anglo-Saxon accounting. Accounting module -> ‘Setup’ -> tick the ‘Anglo-Saxon accounting’ -> save.

continental and anglo saxon accounting odoo-35

In accounting, inventory can be validated Manually or Automatically. While doing manually, the stock is not affected. So it will be manually added at the end of a month or year. Now let's see how it is applied. While implementing,

1. Manual inventory valuation
Set the Products Property accounts as shown for implementing Anglo Saxon with a manual inventory valuation. Products -> Category

continental and anglo saxon accounting odoo-36

Price Difference: The account used to value price difference between purchased price and accounting cost of a product.

continental and anglo saxon accounting odoo-37

Stock Input account: If you are doing real-time inventory, all incoming stock moves will be posted in this account, ie Goods received not Purchased.

continental and anglo saxon accounting odoo-38

Stock Output account: When a sales order is confirmed the product is delivered but not invoiced then it is affected as a Goods issued not invoiced.

continental and anglo saxon accounting odoo-39


Income account: 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.


continental and anglo saxon accounting odoo-40

Expense account: The expense is accounted when a vendor bill is processed, in Anglo-Saxon with perpetual inventory valuation in which case the expense is recognized at customer invoice validation and set as Cost of Goods Sold.

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Now consider the following operations and understand how the accounting entries are posted in those actions.

Action 1: Supplier Invoice validation (While purchasing a product the bill against the order is received)

I am purchasing a ’Jio wifi router’ 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.


continental and anglo saxon accounting odoo-42

Action 2: Supplier Goods Reception (The ordered product has been received)

In this action, no journal entries are being added. 

Action 3: Customer Invoicing (The payment for a corresponding sales order is received)

Now suppose am selling this product to my customer and I have given the bill for the order. Then while processing it, the accounts Goods and Account Receivable are affected with an entry.


continental and anglo saxon accounting odoo-43

Action 4: Customer Shipping (When the product is delivered) During this action no entries are being posted.

2. Automatic Inventory Valuation: 
In this condition, change the product category as ‘Automated’.


continental and anglo saxon accounting odoo-44

Action 1: Supplier Invoice validation (While purchasing a product the bill against the order is received)

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. I am purchasing a ’Jio wifi router’ from a vendor and its actual price is 45/-, but the bill for the order is received first.

In the Purchases -> Create Request for quotation -> add  Products.


continental and anglo saxon accounting odoo-45

Then ‘Goods received not purchased’ (This account has been set for input account and haven’t changed it.) i.e. here the Stock Input account and the ‘Accounts Payable’ accounts are affected with an entry for the corresponding order.

continental and anglo saxon accounting odoo-46

While paying the amount against the bill the ‘Bank’ account is affected. Now while receiving the products, an entry for the ‘Inventory’ ( ie the stock valuation account) is affected. 

continental and anglo saxon accounting odoo-47

Based on this scenario while receiving a bill the accounting entries may look like this.

continental and anglo saxon accounting odoo-48

Action 2: Supplier Goods Reception.
Now I am purchasing a ’Jio wifi router’ from a 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.

continental and anglo saxon accounting odoo-49

When the supplier gives the bill, then the Accounts payable is affected by the corresponding purchase order.

continental and anglo saxon accounting odoo-50

After receiving the bill and doing the payment it is affected in the Bank account.

continental and anglo saxon accounting odoo-51

Based on this scenario while receiving a product the accounting entries may look like this.

continental and anglo saxon accounting odoo-52

Action 3: Anglo-Saxon based on Price Difference.

Now I am purchasing a ’Jio wifi router’ from a vendor but the product is received first before paying the amount.

continental and anglo saxon accounting odoo-53


The actual price of the product is 45/- and here the price of the product is changed in the bill received from the supplier as 55/-. So the difference in the price of product is added to the ‘Price Difference’ account.


continental and anglo saxon accounting odoo-54

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 actual cost of the product and the cost of product while billing.

continental and anglo saxon accounting odoo-55

Action 4: Customer Shipping
I am selling 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.


continental and anglo saxon accounting odoo-56

Now I have given the bill against the order then the Accounts receivable is affected.


continental and anglo saxon accounting odoo-57

Then while receiving the payment, it is affected in the Bank account.

continental and anglo saxon accounting odoo-58

Based on this scenario while shipping a product the accounting entries may look like this.


continental and anglo saxon accounting odoo-59


Action 5: Customer Invoice.
I am 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.

continental and anglo saxon accounting odoo-60

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 ie, ‘Goods’ & ‘Cost of Goods Sold’.

continental and anglo saxon accounting odoo-61

Based on this scenario while invoicing, the accounting entries may look like this.

continental and anglo saxon accounting odoo-62




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