openerp-expert-accounting team mailing list archive

[David Mitchell <david@xxxxxxxxxxxxxxxxxx>]

Hi Fred,

Thank you for the response.

Agreed Quickbooks/Peachtree only brings in the balances that are
outstanding and not the specific detail. Perhaps those applications
are limited a little more by their "framework" :-), although they do
marketing pretty well.

The vision is we'd like OpenERP to outperform these applications in
this instance.

To clarify - I am not actually talking about "history" of closed (aka
Done state) customer invoices and supplier invoices. History is
relatively easy to manage.  I am referring to the the in-flight
invoices that are "open". Their Sales Income has already been booked
and their Purchase Expense has already been booked (in an accrual
method), but the AR and AP are still open. Or if you will, in
mid-Workflow.

It is really about being able to input/capture retain documents that
are mid-Workflow, upon entering opening balances and properly manage
the accounting downstream. If they are put in as part of the initial
opening entry process (maybe in a wizard) I actually see it working
quite well - provided invoice workflow is "made more intelligent" to
know the invoices were "initial Opening entry invoices". Boolean flag
perhaps driving some logic to skip normal create account_moves in the
invoice workflow.

There are several sides of it though . . .the invoice detail has no
effect on the Opening Balances which I agree with from a pure
"accounting keeping the books perspective". So it is easy to bring in
the existing balances associated with the customer/suppliers as part
of the Opening Entries. Why the detail is important is because it does
have an effect on the downstream accounting operations of booking
customer payments and making supplier payments. (e.g. taking cash
discounts, paying within payment term windows to receive the
discounts, retaining accurate past due status when different payment
terms are utilized).

In the current method, the invoice detail (payment terms, invoice line
items, tax position is "not retained" so the accountants have to go to
the actual invoices to validate payment, cash discounts, supplier
payments within a certain window, etc. And then breakdown the booking
to the various GL Accounts when payment occurs (e.g. Sales Discounts,
Purchase Discount accounts, and write-offs, not to mention the normal
A/R Trade, AP Trade, and bank accounts). This is not a big deal if it
is a small shop, but for larger business it is and requires a lot of
manual work to book it (manually calculate the discounts, investigate
the short-pays, etc). If we had a way to bring this info in - they
wouldn't have to do this manual effort as they burn-through the Open
Invoices from prior systems.

The Accounting group does want the detail of the "Open" Invoices both
Payable and Receivables, not just accurate opening debit or credit
balance positions of the partners.

Complicated yes . . . but completely worthwhile from an accounting
operations standpoint. As a comparison, it's like a bank saying to you
if you were a customer - yes you had an outstanding loan with us - we
did a conversion to the new system - now we don't know the payment
terms of the loan you had with us - but we can tell you the
outstanding balance of it and the original date of the invoice. When
you make future payments we can't tell how much we should apply to
principle or the interest portion of your loan.

This detail is also important when we add in finance charge capability
on past due invoices into the system as well. We'll have to bring in
the finance terms associated with invoices as well at that point too.

We realize due to revenue recognition and inventory process varying by
country that it is complicated, but it would be interesting to know if
anyone in the accounting experts group has tried to tackle this issue
yet. It really is an opportunity to make OpenERP better than many of
the other systems  in the market- by leveraging the embedded workflow
system and the framework. (potentially a way to differentiate as well
when RFP's come around).

My question is . . . if the capability was there . . . and it worked
well . . . would your clients use it and see value in it? How much
time would be saved in accounting operations if this capability was
there?

Hopefully, this has helped to clarify the issue and somebody has tried
to tackle this in the past.

Any thoughts from the other experts???

Thanks.



On Thu, Mar 24, 2011 at 7:36 AM, Fred Blauer <fblauer@xxxxxxxxx> wrote:
> Most systems I have seen do not do what you are describing, quickbooks included. The reason is that you don't want to affect the GL or the inventory because the balances are already in there. The detail of the invoice has no effect on the opening balances. What you may be talking about is the history, which is something altogether different. You also have to make sure that if you bring over these transactions that they are for information only, and don't have any effect on the accounting. Otherwise, you are talking about a large project with a lot of complications.
>
> ----- Original Message -----
> From: "David Mitchell" <david@xxxxxxxxxxxxxxxxxx>
> To: openerp-expert-accounting@xxxxxxxxxxxxxxxxxxx
> Sent: Wednesday, March 23, 2011 10:35:06 PM
> Subject: [Openerp-expert-accounting] Alternative method to import open  receivables and payables
>
> Dear Experts,
>
> A quick question for the group regarding opening balances and the
> treatment of open invoices (customer and supplier).
>
> When making opening entries customer beginning balances (which are
> essentially open customer invoices - which show up as Receivables here
> in the US), OpenERP allows users to load up open balances through
> accounting opening journal entries (default open credit is the contra
> account), and associate a reference # (the outstanding invoice
> number). This approach is lacking as actual invoices are not created
> and administrators/financial staff lose critical information on the
> invoice such as payment terms, but the customer's open outstanding
> balance is technically correct. Just not in the ideal form for most
> CFOs here.
>
> While many other accounting systems in the US do this - particularly
> small systems (quickbooks and peachtree), most clients would like to
> be able to import the actual outstanding open invoices and retain the
> downstream "workflow" process. Bringing in the invoices as "Draft"
> won't work because the account_move_create() workflow process creates
> an entry into Sales Income (which has already been recognized in the
> previous ERP system entry). So double booking of Sales Income occurs
> in this instance. And of course you can't import invoices with "State"
> as "open" in v6. Creating and booking Draft invoices to a new Journal
> specifically for this purpose with the credit account being the
> offset/contra opening balance default credit account/held off balance
> sheet as part of the Opening entries doesn't work either because the
> system blocks booking to such an account because it is held as a view.
>
> So, as part of bringing a new client onto OpenERP and entering Opening
> Balances + bringing in actual open customer invoices + open payables
> has anyone defined a process/code to do this effectively, or is
> everyone just accepting that open balances on a partner account can
> only be brought in and not actual "open" invoices. If you do bring
> them in did you use a special module that is in the "ecosystem
> somewhere", or is this an issue for others as well.
>
> If we had this "capability" in OpenERP we would certainly see this as
> an advantage over some of the other Accounting/ERP systems in our
> market that lose individual open invoice details (e.g. Payment Terms)
> when bringing in Opening Balances. Accountants would really like this
> . . . per our controllers on our team.
>
> We feel we may need to modify the Opening Entries capabilities in
> OpenERP, create/modify the existing workflow on invoices, or a
> combination of them both to handle this, but we are wondering if
> anyone has addressed it previously to jumpstart this development.
>
> Thanks as always for a few cycles of your time/thinking about this.
>
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