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[IMP] accounting: year-end closing

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task-2823858

closes odoo/documentation#5031

Signed-off-by: Xavier Platteau (xpl) <xpl@odoo.com>
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Xavier (XPL)
2023-07-04 11:18:16 +00:00
parent 0155844ef5
commit 7ba101ffd5
4 changed files with 90 additions and 82 deletions
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content/applications/finance/accounting/bank.rst
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@@ -85,6 +85,8 @@ You can edit the accounting information and bank account number according to you
- :doc:`get_started/multi_currency`
- :doc:`bank/bank_statements`
.. _bank_accounts/suspense:
Suspense account
----------------
content/applications/finance/accounting/payments.rst
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@@ -91,6 +91,8 @@ Batch Payment`.
- :doc:`payments/batch`
- :doc:`payments/batch_sdd`
.. _payments/matching:
Payments matching
-----------------
content/applications/finance/accounting/reporting.rst
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@@ -30,6 +30,8 @@ you want to compare the chosen time period with. You can choose up to 12
periods back from the date of the report if you don't want to use the
default **Previous 1 Period** option.
.. _reporting/balance-sheet:
Balance Sheet
-------------
@@ -103,6 +105,8 @@ occurred during a certain period of time.
.. image:: reporting/main_reports05.png
.. _reporting/aged-payable:
Aged Payable
------------
@@ -112,6 +116,8 @@ have gone unpaid.
.. image:: reporting/main_reports02.png
.. _reporting/aged-receivable:
Aged Receivable
---------------
@@ -129,6 +135,8 @@ operating, investing and financing activities.
.. image:: reporting/main_reports03.png
.. _reporting/tax-report:
Tax Report
----------
content/applications/finance/accounting/reporting/year_end.rst
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Year-end closing
================
Before going ahead with closing a fiscal year, there are a few steps one
should typically take to ensure that your accounting is correct, up to
date, and accurate:
- Make sure you have fully reconciled your **bank account(s)** up to
year end and confirm that your ending book balances agree with
your bank statement balances.
- Verify that all **customer invoices** have been entered and approved.
- Confirm that you have entered and agreed all **vendor bills**.
- Validate all **expenses**, ensuring their accuracy.
- Corroborate that all **received payments** have been entered and
recorded accurately.
Year-end closing is vital for maintaining financial accuracy, complying with regulations, making
informed decisions, and ensuring transparency in reporting.
.. _year-end/fiscal-years:
Manage fiscal years
===================
Fiscal years
============
In most cases, the fiscal years last 12 months. If it is your case, you
just have to define what is the last day of your fiscal year in the
accounting settings. By default, it is set on the 31st December.
By default, the fiscal year is set to last 12 months and end on December 31st. However, its duration
and end date can vary due to cultural, administrative, and economic considerations.
However, there might be some exceptions. For example, if it is the first
fiscal year of your business, it could last more or less than 12 months.
In this case, some additional configuration is required.
To modify these values, go to :menuselection:`Accounting --> Configuration --> Settings`. Under the
:guilabel:`Fiscal Periods` section, change the :guilabel:`Last Day` field if necessary.
Go to :menuselection:`accounting --> configuration --> settings` and activate
the fiscal years.
You can then configure your fiscal years in
:menuselection:`accounting --> configuration --> fiscal years`.
If the period lasts *more* than or *less* than 12 months, enable :guilabel:`Fiscal Years` and
:guilabel:`Save`. Go back to the :guilabel:`Fiscal Periods` section and click :guilabel:`➜ Fiscal
Years`. From there, click :guilabel:`Create`, give it a :guilabel:`Name`, and both a
:guilabel:`Start Date` and :guilabel:`End Date`.
.. note::
You only have to create fiscal years if they last more or less
than 12 months.
Once the set fiscal period is over, Odoo automatically reverts to the default periodicity, taking
into account the value specified in the :guilabel:`Last Day` field.
.. _year-end/checklist:
Year-end checklist
==================
- Run a **Tax report**, and verify that your tax information is correct.
Before closure
--------------
- Reconcile all accounts on your **Balance Sheet**:
Before closing a fiscal year, ensure first everything is accurate and up-to-date:
- Agree your bank balances in Odoo against your actual bank balances
on your statements. Utilize the **Bank Reconciliation** report to
assist with this.
- Make sure all bank accounts are fully :doc:`reconciled <../bank/reconciliation>` up to year-end,
and confirm that the ending book balances match the bank statement balances.
- Verify that all :doc:`customer invoices <../customer_invoices>` have been entered and
approved and that there are no draft invoices.
- Confirm that all :doc:`vendor bills <../vendor_bills>` have been entered and agreed upon.
- Validate all :doc:`expenses <../../expenses>`, ensuring their accuracy.
- Corroborate that all :doc:`received payments <../payments>` have been encoded and recorded
accurately.
- Close all :ref:`suspense accounts <bank_accounts/suspense>`.
- Book all :doc:`depreciation <../vendor_bills/assets>` and :doc:`deferred revenue
<../customer_invoices/deferred_revenues>` entries.
- Reconcile all transactions in your cash and bank accounts by
running your **Aged Receivables** and **Aged Payables** reports.
Closing a fiscal year
---------------------
- Audit your accounts, being sure to fully understand the
transactions affecting them and the nature of the
transactions, making sure to include loans and fixed assets.
Then, to close the fiscal year:
- Run the optional **Payments Matching** feature, under the **More**
dropdown on the dashboard, validating any open **Vendor Bills** and
**Customer Invoices** with their payments. This step is optional,
however it may assist the year-end process if all outstanding
payments and invoices are reconciled, and could lead finding
errors or mistakes in the system.
- Run a :ref:`tax report <reporting/tax-report>`, and verify that all tax information is correct.
- Reconcile all accounts on the :ref:`balance sheet <reporting/balance-sheet>`:
- Your accountant/bookkeeper will likely verify your balance sheet
items and book entries for:
- Update the bank balances in Odoo according to the actual balances found on the bank statements.
- Reconcile all transactions in the cash and bank accounts by running the :ref:`aged receivables
<reporting/aged-receivable>` and :ref:`aged payables <reporting/aged-payable>` reports.
- Audit all accounts, being sure to fully understand all transactions and their nature, making
sure to include loans and fixed assets.
- Optionally, run :ref:`payments matching <payments/matching>` to validate any open vendor bills
and customer invoices with their payments. While this step is optional, it could assist the
year-end closing process if all outstanding payments and invoices are reconciled, potentially
finding errors or mistakes in the system.
- Year-end manual adjustments, using the **Adviser Journal Entries**
menu (For example, the **Current Year Earnings** and **Retained
Earnings** reports).
Next, the accountant likely verifies balance sheet items and book entries for:
- **Work in Progress**.
- year-end manual adjustments,
- work in progress,
- depreciation journal entries,
- loans,
- tax adjustments,
- etc.
- **Depreciation Journal Entries**.
If the accountant/bookkeeper is going through the year-end audit, they may want to have paper copies
of all balance sheet items (such as loans, bank accounts, prepayments, sales tax statements, etc.)
to compare these with the balances in Odoo.
- **Loans**.
.. tip::
During this process, it is good practice to set a :guilabel:`Journal Entries Lock Date` to the
last day (inclusive) of the preceding fiscal year by going to :menuselection:`Accounting -->
Accounting --> Lock Dates`. This way, the accountant can be confident that nobody changes the
transactions while auditing the books. Users from the *advisor* access group can still create
and modify entries.
- **Tax adjustments**.
Current year's earnings
~~~~~~~~~~~~~~~~~~~~~~~
If your accountant/bookkeeper is going through end of the year auditing,
they may want to have paper copies of all balance sheet items (such as
loans, bank accounts, prepayments, sales tax statements, etc...) to
agree these against your Odoo balances.
Odoo uses a unique account type called **current year's earnings** to display the amount difference
between the **income** and **expenses** accounts.
During this process, it is good practice to set the **Lock date for
Non-Advisers** to the last day of the preceding financial year, which is
set under the accounting configuration. This way, the accountant can be
confident that nobody is changing the previous year transactions
while auditing the books.
.. note::
The chart of accounts can only contain one account of this type. By default, it is a 999999
account named :guilabel:`Undistributed Profits/Losses`.
.. image:: year_end/close_fiscal_year01.png
To allocate the current year's earnings, create a miscellaneous entry to book them to any equity
account. Once done, confirm whether or not the current year's earnings in the **balance sheet** is
correctly reporting a balance of zero. If that is the case, set an :guilabel:`All Users Lock Date`
to the last day of the fiscal year by going to :menuselection:`Accounting --> Accounting --> Lock
Dates`.
.. _year-end/closing:
.. warning::
Setting an :guilabel:`All Users Lock Date` is **irreversible** and cannot be removed.
Closing the fiscal year
=======================
In Odoo there is no need to do a specific year end closing entry in order to
close out income statement accounts. The reports are created in
real-time, meaning that the **Income statement** corresponds directly with
the year-end date you specify in Odoo. Therefore, any time you generate
the **Income Statement**, the beginning date will correspond with the
beginning of the **Fiscal Year** and the account balances will all be 0.
Once the accountant/bookkeeper has created the journal entry to allocate
the **Current Year Earnings**, you should set the **Lock Date** to the last day
of the fiscal year. Making sure that before doing so, you confirm
whether or not the current year earnings in the **Balance Sheet** is
correctly reporting a 0 balance.
.. note::
A specific year-end closing entry is **optional** in order to close out the **profit and loss
statement**. The reports are created in real-time, meaning that the profit and loss statement
corresponds directly with the year-end date specified in Odoo. Therefore, any time the **income
statement** is generated, the beginning date corresponds with the beginning of the **fiscal
year** and all account balances should equal zero.