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[IMP] accounting: improve accounting concept
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‎content/applications/finance/accounting.rst‎

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Double-entry bookkeeping
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========================
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Odoo automatically creates all the behind-the-scenes journal entries
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for each of your accounting transactions: customer invoices, point of
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sale order, expenses, inventory moves, etc.
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Odoo automatically creates all the underlying journal entries for all accounting transactions (e.g.,
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customer invoices, vendor bills, point-of-sales orders, expenses, inventory valuations, etc.).
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Odoo uses the rules of double-entry bookkeeping system: all journal
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entries are automatically balanced (sum of debits = sum of credits).
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Odoo uses the double-entry bookkeeping system, whereby every entry needs a corresponding and
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opposite counterpart in a different account, with one account debited and the other credited.
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It ensures that all transactions are recorded accurately and consistently and that the accounts
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always balance.
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.. seealso::
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- :doc:`Understand Odoo's accounting transactions per document
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<accounting/get_started/cheat_sheet>`
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:doc:`Accounting Cheat Sheet <accounting/get_started/cheat_sheet>`
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Accrual and Cash Basis Methods
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==============================
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Accrual and cash basis
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======================
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Odoo supports both accrual and cash basis reporting. This allows you to
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report income / expense at the time transactions occur (i.e., accrual basis), or when
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payment is made or received (i.e., cash basis).
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Both accrual and cash basis accounting are supported in Odoo. This allows reporting income and
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expense either when the transaction occurs (accrual basis) or when the payment is made or received
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(cash basis).
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Multi-companies
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===============
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.. seealso::
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:doc:`Cash basis <accounting/taxes/cash_basis>`
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Odoo allows one to manage several companies within the same database. Each
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company has its own chart of accounts and rules. You can get
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consolidation reports following your consolidation rules.
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Multi-company
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=============
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Users can access several companies but always work in one company at a
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Several companies can be managed within the same database. Each company has its :doc:`chart of
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accounts <accounting/get_started/chart_of_accounts>`, which is also useful to generate consolidation
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reports. Users can access several companies but can only work on a single company's accounting at a
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time.
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Multi-currencies
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================
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Multi-currency environment
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==========================
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Every transaction is recorded in the default currency of the
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company. For transactions occurring in another currency, Odoo stores
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both the value in the currency of the company and the value in the
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currency of the transaction. Odoo can generate currencies gains and
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losses after the reconciliation of the journal items.
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A :doc:`multi-currency <accounting/get_started/multi_currency>` environment with an automated
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exchange rate to ease international transactions is available in Odoo. Every transaction is recorded
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in the company's default currency; for transactions occurring in another currency, Odoo stores both
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the value in the company's currency and the transactions' currency value. Odoo generates currency
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gains and losses after reconciling the journal items.
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Currency rates are updated once a day using a yahoo.com online
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web-service.
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.. seealso::
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:doc:`Manage a bank in a foreign currency <accounting/bank/foreign_currency>`
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International Standards
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International standards
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=======================
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Odoo accounting supports more than 50 countries. The Odoo core
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accounting implements accounting standards that are common to all
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countries. Specific modules exist per country for the
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specificities of the country like the chart of accounts, taxes, or
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bank interfaces.
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In particular, Odoo's core accounting engine supports:
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* Anglo-Saxon Accounting (U.S., U.K.,, and other English-speaking
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countries including Ireland, Canada, Australia, and New Zealand)
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where costs of good sold are reported when products are
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sold/delivered.
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* European accounting where expenses are accounted at the supplier
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bill.
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Odoo Accounting supports more than 70 countries. It provides the central standards and mechanisms
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common to all nations, and thanks to country-specific modules, local requirements are fulfilled.
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Fiscal positions exist to address regional specificities like the chart of accounts, taxes, or any
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other requirements.
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Odoo has modules to comply with IFRS rules.
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Accounts Receivable and Payable
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===============================
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By default, Odoo uses a single account for all account
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receivable entries and one for all accounts payable entries. You can
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create separate accounts per customers/suppliers, but you don't need
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to.
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As transactions are associated to customers or suppliers, you get
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reports to perform analysis per customer/supplier such as the customer
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statement, revenues per customers, aged receivable/payables, ...
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.. seealso::
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:doc:`Fiscal localization packages <fiscal_localizations>`
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Wide range of financial reports
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Accounts receivable and payable
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===============================
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In Odoo, you can generate financial reports in real time. Odoo's
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reports range from basic accounting reports to advanced management
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reports. Odoo's reports include:
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By default, there is a single account for the account receivable entries and one for the account
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payable entries. As transactions are linked to your **contacts**, you can run a report per customer,
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vendor, or supplier.
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The **Partner Ledger** report displays the balance of your customers and suppliers. It is available
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by going to :menuselection:`Accounting --> Reporting --> Partner Ledger`.
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Reporting
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=========
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The following financial :doc:`reports <accounting/reporting>` are available and updated in
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real-time:
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+-----------------------------------------------+
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| Financial reports |
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+============+==================================+
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| Statement | Balance sheet |
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| +----------------------------------+
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| | Profit and loss |
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| +----------------------------------+
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| | Cash flow statement |
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| +----------------------------------+
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| | Tax report |
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| +----------------------------------+
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| | ES sales list |
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+------------+----------------------------------+
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| Audit | General ledger |
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| +----------------------------------+
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| | Trial balance |
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| +----------------------------------+
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| | Journal report |
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| +----------------------------------+
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| | Intrastat report |
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| +----------------------------------+
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| | Check register |
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+------------+----------------------------------+
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| Partner | Partner ledger |
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| +----------------------------------+
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| | Aged receivable |
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| +----------------------------------+
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| | Aged payable |
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+------------+----------------------------------+
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| Management | Invoice analysis |
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| +----------------------------------+
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| | Unrealized currency gains/losses |
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| +----------------------------------+
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| | Depreciation schedule |
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| +----------------------------------+
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| | Disallowed expenses |
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| +----------------------------------+
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| | Budget analysis |
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| +----------------------------------+
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| | Product margins |
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| +----------------------------------+
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| | 1099 report |
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+------------+----------------------------------+
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.. tip::
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:doc:`Create and customize reports <accounting/reporting/customize>` with Odoo's report engine.
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Tax report
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----------
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Odoo computes all accounting transactions for the specific tax period and uses these totals to
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calculate the tax obligation.
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.. important::
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Once the tax report has been generated for a period, Odoo locks it and prevents the creation of
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new journal entries involving VAT. Any correction to customer invoices or vendor bills has to
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be recorded in the next period.
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.. note::
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Depending on the country's localization, an XML version of the tax report can be generated to be
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uploaded to the VAT platform of the relevant taxation authority.
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Bank synchronization
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====================
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The bank synchronization system directly connects with your bank institution to automatically
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import all transactions into your database. It gives an overview of your cash flow without logging
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into an online banking system or waiting for paper bank statements.
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* Performance reports (such as Profit and Loss, Budget Variance)
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* Position reports (such as Balance Sheet, Aged Payables, Aged
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Receivables)
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* Cash reports (such as Bank Summary)
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* Detail reports (such as Trial Balance and General Ledger)
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* Management reports (such as Budgets, Executive Summary)
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Odoo's report engine allows you to customize your own report based on
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your own formulae.
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Import bank feeds automatically
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===============================
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Bank reconciliation is a process that matches your bank statement
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lines, as supplied by the bank, to your accounting transactions in the
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general ledger. Odoo makes bank reconciliation easy by frequently
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importing bank statement lines from your bank directly into your Odoo
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account. This means you can have a daily view of your cashflow without
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having to log into your online banking or wait for your paper bank
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statements.
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.. seealso::
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:doc:`Bank synchronization <accounting/bank/bank_synchronization>`
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Odoo speeds up bank reconciliation by matching most of your imported
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bank statement lines to your accounting transactions. Odoo also
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remembers how you've treated other bank statement lines and provides
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suggested general ledger transactions.
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Inventory valuation
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===================
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Calculate the tax you owe your tax authority
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============================================
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Both periodic (manual) and perpetual (automated) inventory valuations are supported in Odoo. The
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available methods are standard price, average price, :abbr:`LIFO (Last-In, First-Out)` and
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:abbr:`FIFO (First-In, First-Out).`
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Odoo totals all your accounting transactions for your tax period and
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uses these totals to calculate your tax obligation. You can then check
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your sales tax by running Odoo's Tax Report.
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.. seealso::
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:doc:`View the impact of the valuation methods on transactions
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<../inventory_and_mrp/inventory/management/reporting/inventory_valuation_config>`
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Inventory Valuation
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===================
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Retained earnings
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=================
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Odoo support both periodic (manual) and perpetual (automated)
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inventory valuations. The available methods are standard price,
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average price, LIFO (for countries allowing it) and FIFO.
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Retained earnings are the portion of income retained by a business. Odoo calculates current year
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earnings in real-time, so no year-end journal or rollover is required. The profit
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and loss balance is automatically reported on the balance sheet report.
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.. seealso::
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- :doc:`View impact of the valuation method on your transactions
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</applications/inventory_and_mrp/inventory/management/reporting/inventory_valuation_config>`
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:doc:`Accounting Cheat Sheet <accounting/get_started/cheat_sheet>`
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Easy retained earnings
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======================
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Fiduciaries
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===========
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The :guilabel:`Accounting Firms` mode can be activated by going to :menuselection:`Accounting -->
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Configuration --> Settings --> Accounting Firms mode`. When enabled:
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Retained earnings are the portion of income retained by your
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business. Odoo automatically calculates your current year earnings in
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real time so no year-end journal or rollover is required. This is
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calculated by reporting the profit and loss balance to your balance
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sheet report automatically.
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- The document's sequence becomes editable on all documents;
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- The :guilabel:`Total (tax incl.)` field appears to speed up and control the encoding by automating
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line creation with the right account and tax;
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- :guilabel:`Invoice Date` and :guilabel:`Bill Date` are pre-filled when encoding a transaction.
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- A :guilabel:`Quick encoding` option is available for customer invoices and vendor bills.
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.. toctree::
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:titlesonly:

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