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Bank Account Reconciliation

Project description

License: AGPL-3

Bank Statement Reconciliation

This module is designed to provide an easy method in which Odoo accounting users can manually reconcile/validate their financial transactions from their financial institution/transaction providers (e.g. Paypal, A financial institution, google wallet, etc) against Odoo GL Chart of Account bank accounts.

Users will be able to validate and indicate if a transaction has “Cleared the Bank” using a checkmark on a new Reconcile Financial Account Statement view on each individual financial transaction. Users will also be able to mark transactions on a bank account for future research.

The idea is that as a first step users will manually look at their paper statement and line-by-line check off which financial transactions have cleared the bank in Odoo using the new Bank Reconciliation Wizard. These changes will be displayed on the new Reconcile Financial Account Statement tree view screen. This is the process in which many companies reconcile (aka Audit) their bank account statements and accounting system today and represents good segregation of duties.

Users can save their in-process reconciliations.

Background

Using the search view filters - users will also be able to effectively sort, filter the transactions on a particular GL Financial Account. This new screen will display the journal items associated with a particular bank account. Several of the field labels have been relabeled to a more common vernacular.

The need for this module is driven by the following:

  • Users want to easily record whether bank transactions sent to their bank have “cleared the bank”- definition of “cleared the bank”: presented to the bank for payment and paid by the bank - added/subtracted funds on a bank account.
  • Users want the ability to validate if the bank processed the transactions them correctly (e.g. properly encoded transaction - e.g. company sent a payment of $20.20 to the bank. Was it processed for $20.20?). This can be considered “Auditing the bank statement”. We don’t assume the bank correctly processed any transaction.
  • Users want to understand what payments they’ve made are still outstanding and have not been paid by the bank.
  • The financial auditing segregation standard of separating the duties of: recording customer payments and making deposits; recording supplier payments and writing checks; and monitoring bank account activity. This segregation of duties is necessary to monitor and help prevent fraud.

Assumptions

  1. Companies using Odoo have setup a one-to-one relationship between their bank accounts and their Odoo GL accounts. Each bank account should have a corresponding GL account that is not shared with another account. Example:

    Odoo GL Account # Corresponding Bank Account
    10100 Bank (AR) Account Checking 5434 (held at Institution A)
    10200 Master Bank Account 2343 (held at Institution A)
    10300 Bank Payable Account Checking 5678 (held at Institution A)
    10400 Bank Payroll Account 6656 (held at Institution B)
    10500 Paypal Account 3343 (held at Paypal)
    10600 Google Wallet Account 6788
    10700 AMEX Corporate Card Account 9989
  2. Companies have included a Non-Deposited Funds Account in their GL account (typically in current assets in their bank account areas). This account is used to store payments that have been recorded in Odoo - but not yet deposited into the financial institution. (NOTE: this account is important to have if the user “batches check deposits”- which is the process of making a large single deposits of customer payment into the bank (e.g. $20,000USD), but it is made up of smaller checks (e.g. 20 checks of $1,000 each). Many banks just record the total deposit amount ($20,000) and don¬タルt provide the breakdown of the individual checks that make up the larger deposit. This setup approach enables users to drill down and see the individual checks that make up a larger deposit.

Recommendations

From a cash management and financial control perspective, it is recommended that users establish the following four (4) bank accounts at their financial institution at a minimum to handle financial transactions. (NOTE: we recommend users place the last 4 digits of their bank account in the GL account name of the account. It helps accountants in their management of the system):

  • Bank (AR) Account Checking 5434. This is a checking account designated as the account where payments made to the company are deposited (e.g. a customer payment made by check is deposited here, or a customer paying by electronic transaction EFT/ACH is deposited into this GL).
  • Master Bank Account 2343. This is the master account in which the company keeps the majority of their funds. Often with the most limited access.
  • Bank Payable Account Checking 5678. This is a checking account designated for the company to pay their expenses from. (e.g. Company writes a check to pay a supplier for their office supplies).
  • Bank Payroll Account 6656. This is a checking account designated for a company to pay their employees and payroll.

Note

There has been common confusion in the Odoo community about managing bank statements in the base Odoo system. This module hopes to alleviate this gap and provide users with a sound alternative to maintain fiscal control, be easy to understand, and allow for future growth.

Why this approach?

Users in Odoo have several options in which to record financial transactions that affect the balances of a bank account (GL Bank Account entries). We believe our approach allows these to work in conjunction with each other: Import Electronic Bank Statements to enter payments (this approach follows the philosophy that you first find out that a transaction has occurred from your bank which is very common in Europe due to the electronic nature of transactions).

  • Payment Order Payments (using the direct Method) - Payments are instantly recorded and financial transactions posted into the GL
  • Voucher Payments - Payments are instantly recorded and financial transactions posted into the GL
  • Sales Receipts/Refunds
  • Transfers between accounts (a new module is being developed to help manage this)
  • Funds moved from the Undeposited Funds GL account to a Bank Account GL account.
  • Direct Journal Entries

Usage

  • Go to Accounting
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Roadmap

  • Include a wizard to pre-filter the tree view, and include additional reports for accountants. And include the ability to execute quick entry of common statement related transactions such as recording bank service fees (an Expense), and Interest Income Earned on the bank account (Income), when allowed by law. Often, companies will print their reconciliation, staple it to their bank statement and file the documents for future review and audit.
  • Include more information to add further clarity throughout Odoo for financial transactions, and include the ability to quickly compare an imported bank statement with a GL Bank Account’s recorded transaction, including autoreconciling them - and providing the information available for review.

Bug Tracker

Bugs are tracked on GitHub Issues. In case of trouble, please check there if your issue has already been reported. If you spotted it first, help us smash it by providing detailed and welcomed feedback.

Credits

Images

  • Odoo Community Association: Icon.

Contributors

Funders

The development of this module has been financially supported by:

Maintainer

Odoo Community Association

This module is maintained by the OCA.

OCA, or the Odoo Community Association, is a nonprofit organization whose mission is to support the collaborative development of Odoo features and promote its widespread use.

To contribute to this module, please visit https://odoo-community.org.

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