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Re: About Prepayment in ecommerce workflow

 

Hi

Based on what I can remember.

Prepayments exist in both the Current Assets and Current Liabilities sections of the Balance Sheet. Best practice is NOT to aggregate them. If the amounts are /material/, then they should not be rolled into Accounts Payable/Receivable for reporting purposes.

Where prepayments have been received that relate to an amount due beyond the current year, these amounts should be transferred to a separate bank trust account and NOT shown in the accounts, which only show prepayments due in the forthcoming financial year.

In Britain the energy utilities are particularly bad at accounting for prepayments, as they seek to protect their cash flows by generating direct debits on their customers' bank accounts, even when the customer has a credit balance on their account. Keeping prepayments isolated and starkly apparent is a good way of forcing abusive companies to behave themselves!

Robin St.Clair


On 18/11/2013 11:39, Eric Caudal wrote:
I am not so worried on the BS reporting (for the moment...) but I think we are on the same line, meaning that when a payment is issued before the invoice is created it is a prepayment and it should be recorded in a different account from the general AR account (In China at least and several other countries). This is currently not possible with the current module which relies on the general AR account to do so automatically
(in method _prepare_payment_move_line)
        credit_line = {
            'name': move_name,
            'debit': 0.0,
            'credit': amount,
*            'account_id': partner.property_account_receivable.id,*
            'journal_id': journal.id,
            'period_id': period.id,
            'partner_id': partner.id,
            'date': date,
            'amount_currency': -amount_currency,
            'currency_id': currency_id,
        }

Eric CAUDAL
Eric Caudal

On 11/18/2013 07:31 PM, MG @Laposte wrote:
I don't fully understand the opinion stating that
/_prepayment accounts have to be different from the AR/AP general account for the mere reason that they are on the other side of the BS_/

AR/AP (accounts receivable/ accounts payable) must be used to record any transation with a partner. Their standard accounting balance is a debit for A/R and a credit for A/P. But when a transaction like a prepayment or a mere duplicate payment for instance occurs then the balance can be the opposite of the standard/expected one: a customer account can be a credit meaning that the customer has paid in advance of the issuance of an invoice. The normal accounting workflow makes such balance appear on the Balance sheet on the riverse side (credit in our example). This is not an issue for most of the cases; but some specific national accounting regulation might impose a specific treatment. These national specifications should be precisely explained, as accounting reflects legal requirements.
Le 18/11/2013 07:57, Guewen Baconnier a écrit :
Hi,

On 11/16/2013 09:28 AM, Eric Caudal wrote:
Hi,
There is an aspect of OpenERP which seems to not very well implemented
while it is wildly spread in accounting practices: prepayment treatment. In many countries (all?), prepayment accounts have to be different from the AR/AP general account for the mere reason that they are on the other side of the BS. This behavior is at least true in China, NZ, UK, AU and
probably in any anglo-saxon accounting countries.

We have created a simple module for this (
https://apps.openerp.com/apps/7.0/account_prepayment) to create a
separate property for AR and AP prepayments. In every implementation I
have in accounting, the prepayment strategy is a problem in standard
implementation that we can solve with this very simple module (my point
is that this module or similar should be actually a standard module).

In ecommerce sales strategy where payment is made on website, we can
rely on several modules such as sale_payment_method and
sale_automatic_workflow to automate the payment. Nevertheless, they rely
on the AR account to create the prepayment transaction which in my
opinion is not correct.
NB: This could probably be even more complex as for certain payment
method, account should "Uncleared Payments".

Not sure about that here... Frédéric's opinion is welcome :-)


I am thinking of adapting the sale_payment_method to make it dependent
on the account_prepayment and add a tickbox "Use prepayment accounts" in
payment method and automatic_payment method.

I think that's not the correct way: you should rather create a third module with 'auto_install' on "account_prepayment" and "sale_payment_method", so when both are installed you get the tickbox "Use prepayment accounts".






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