Chapter: 4 - Financial management aspects of vendors and customers with Odoo Accounting

Customer Finance Management With Odoo Accounting Module

Customer management is vital in the business operations as without proper control of their operation with regards to the company you will fall back on the operation, receiving payments, the aspects of product movement, and many more. The financial aspects regarding the customer operations are important as you will have to have dedicated operational tools to manage them. In Odoo there is a dedicated tab of menus that will help you to deal with the customer finance management operations. The Customer tabs which can be accessed from the dashboard of the Accounting module will depict you with optional menus such as Invoices, Credit Note, Receipts, Payments, Batch Payments, Follow-ups, Direct debit Mandates, Products, and Customers. Each of these menus will be serving to add up the financial management aspects related to the customer operations towards the company. Let's now move on to each of the configurational menus which help you in the aspects of customer finance management, one by one in detail for the next section.

Creating your Customer Invoices

The Invoices of customers are to be handled efficiently and with at most care and concerns. Moreover, you should have dedicated systems and tools to do so. The Odoo Accounting module holds a dedicated Invoice management menu for the customers, which can be accessed from the Customers Menu of the Accounting module. The following screenshot depicts the Invoices menu of the Accounting module where all the invoices related to company operations towards the customers are depicted. The Invoice Number, Customer details, Invoice Date, Due Date, next Activity, Tax Excluded details, Total invoice amount, Status and the Payment status will be depicted.

As you can see in the following screenshots there is color coordination on the Due date as well as the Status. This advanced feature of Odoo helps you to identify as well as classify the various operations. The red indication in the Due Date indicates that the date is over, and yellow will indicate that the Due Date is today. Under the status, if it's Posted or Paid.

Customer Finance Management With Odoo Accounting Module

You have the provision to edit the existing invoice details if required providing you the ability to modify it based on the requirement but only by authorized persons so that the security is not disrupted. You also have the provision to create new invoices by selecting the Create option available in the Invoices menu. In the Invoice creation menu just as depicted in the following screenshot, the Customer Invoice number will be also depicted and the shortcode INV is taken as the prefix of the invoice which is in respect to the operations of the Journal and it can be modified. Further, you can select the Customer, Payment Reference, Invoice date, Due Date and the Journal where the entries should be defined can be provided.

Under the Invoice Lines tab, the Product of the sales can be defined. Here you can select the Add a line option to add the products and the Add a section to add a new section to the invoice lines. Furthermore, the Add a note option will allow you to describe a note to the customer on the invoice itself. Here, you can add the Product, Label, Account, Analytical Account, Analytical Tag, Intrastat, Quantity, Price, Taxes, and the Subtotal of the products being defined. Furthermore, you can define the Terms and Conditions with respect to the Invoice which has been defined. The Untaxed Amount along with the Tax with the percentage indication and the Total amount will be described.

Customer Finance Management With Odoo Accounting Module

The Journal Items of the respective Invoice will be defined in the respective menu based on the products and other attributes which have been mentioned in the Invoice. Once the products are added to the invoice the respective ledgers will be added in the Journal items. It includes the income account defined in the Product/Product category, the Receivable Account, and Tax Account. The Account details, Label, Analytical Tags, Debit, Credit, and Tax Grids will be defined. You will also be able to view the Cut-Off of the respective Account as shown in the following screenshot.

The ledger posting operations in Odoo are conducted by Continental and Anglo Saxon Accounting lets understand both in detail. In Continental Accounting when an Invoice is created, the Income Account is credited and the Account Receivable is debited. Since the Account Receivable is in the nature of 'Assets' and as the Assets value increases the Account Receivable is debited. Similarly, as the Income Account is of nature 'Income' and as the Income increases, the Income Account is credited. Now the tax account is also credited since its nature is 'Liability' and as the liabilities increase the Tax Account is credited. Moreover, in Anglo Saxon Accounting, during an Invoice creation, the Accounts affected are the same.

Customer Finance Management With Odoo Accounting Module

The Other Info tab will give you further information regarding the respective invoice which has been created and you will have certain aspects which can be configured. In the Other Info tab, the Invoice menu will provide you options to define customer References, Salespeople, Receipt Link if any, and the Payment QR- Code can be defined. Furthermore, the Accounting aspects such as the Incoterm, Fiscal Position, Interests Country, and the Cost Rounding Method will be defined. There is also an option to enable or disable based on your need to Post Automatically To Check. Moreover, when the Post Automatically option is set the Journal entries are posted automatically based on the Accounting Date mentioned. In addition, if you or any user of the Odoo platform is unsure of the operations of the To Check options can be enabled which will indicate that the respective document needs to be checked.

Customer Finance Management With Odoo Accounting Module

Once the Invoice configuration is finished for the invoice to be sent to the customer you can select the Send & Print option which will not only send the Invoice but also print you a copy if a printer is connected to the system. The printed copy will help to handle the customer the invoice or can be used to be posted by mail with a custom letter to the customer. In case you need to preview the invoice which has been defined to understand how the invoice to be sent to the customer will look like you can select the Preview option. The following screenshot depicts how the invoice will be previewed to the customer here, all the information that has been defined while creating the invoice will be depicted other than the ones which are based on the in-house operations of the company. Moreover, the details such as the Journal and Chart of accounts will not be depicted.

Customer Finance Management With Odoo Accounting Module

Once the Invoices are provided and the required modifications are being done you can opt for them to be sent to the customer. The invoice will be sent to the customer via mail or by post as per the requirements. As the customer generates the payment in regards to the invoice sent you can register the payment generated towards you by selecting the Register Payments option available in the respective invoice window. Upon selecting to register the payments you will be depicted with the following pop-up window where you can define the Journal Payment Method as Manual, Branch Deposit, or SEPA Direct Debit. Furthermore, the Receipt Bank Account details can be defined along with the Amount and Currency. In addition, the Payment Date and the Memo can also be defined. Finally, select the Create Payment option that is available to register the payment in the Odoo platform.

Customer Finance Management With Odoo Accounting Module

The Payment revival operations of Continental Accounting, as well as the Anglo Saxon Accounting, differs in operation this will provide an operations control of the operations of the accounting operations of the business. Let's understand the operational aspects of those. In the Continental accounting, once the payment is registered, the Account Receivable is credited and the Outstanding Receipts Account is debited. After reconciliation with the bank statement, only the Outstanding Receipts Account is credited and the Bank Account is debited. This is the new feature introduced in Odoo 14 in 'Cash' and 'Bank' Journals. An Outstanding Receipt Account is the Account where all the incoming payment entries triggered by Invoice/Refunds will be posted. During reconciliation, they are shown in blue color in the widget and reconciled with the concerned transaction instead of Account Receivable. Further, the ribbon IN PAYMENT will be changed to PAID in the invoice.

While in Anglo Saxon accounting, once the invoice has been posted we can see the Expense Account also get affected. Since the Anglo Saxon accounting expense is affected once the Sales process has been validated. Thus the stock output account gets credited and the Expense account gets debited.

Once the payment is registered the respective invoice menu will depict an In Payment label as shown in the following screenshot. If the payment has been completed, the Paid label will be depicted as the status of the respective invoice.

Customer Finance Management With Odoo Accounting Module

Once the Payments have been received and you want to refund the amount due to certain internal reasons or a percentage of the amount you can define the Credit Note to the respective invoice by selecting the Credit Note smart invoice and you will be depicted with the following menu where the Credit Note details such as the Credit Method, Reason, Reverse Date can be defined as Specific or Journal Entry Date. Furthermore, the Use Specific Journal details along with the Refund Date can be defined as your need. Finally, you should select the Reverse option for the amount to be refunded to the customer or else select the Cancel option.

Customer Finance Management With Odoo Accounting Module

With all the functional menus and the windows that are available in the Odoo Accounting module concerning invoice management, you can generate customer Invoices and perform the various operations regarding them. As of now, you will be clear on the aspects of Invoice management with the Odoo Accounting module. Let now move on to the next customer management menu, the Credit Note in regards to customer management.

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