Chart of Accounts¶
When configuring the software, OpenERP allows you to choose predefined charts of accounts, which include all basic configuration, such as tax codes and fiscal positions. Of course, you can also define your own chart of accounts.
Using a Preconfigured Chart of Accounts¶
On installation, the software allows you to select a default chart of accounts from a huge list of predefined charts. To install the chart of accounts as well as the tax definitions for your own country (in most cases), select the chart corresponding to your country from the Installation Wizard. The Generic Chart of Accounts offers a default (but limited) set of accounts which can be used as a basic chart in any country. The Chart of Accounts list also includes a lot of localised charts of accounts.
The wizard will change a bit according to the chart of accounts you select. For the Generic Chart you will be able to add a tax percentage, which will not be the case when you install, for instance, the chart named Belgium - Plan Comptable Minimum Normalise. Here OpenERP will automatically install the tax configuration for Belgium too. You will, however, be able to select the default sales and purchase tax to be added when you create a new product.
Please keep in mind that even when you use a default chart of accounts, you can still modify it to fit your needs.
You can install a chart from the list of modules too, so simply skip the installation wizard then. The module name will be like l10n_XX where XX represents your country code in two letters. For example, to get the chart of accounts for Belgium, go to Settings ‣ Modules ‣ Modules and install the module l10n_be. This will propose the exact same chart from the wizard (Belgium - Plan Comptable Minimum Normalise).
Some of these pre-defined charts of accounts are comprehensive and accurate, others rather have a more tentative status and are simply indicators of the possibilities. You can modify these, or build your own accounts onto the default chart, or replace it entirely with a custom chart.
Creating a Chart of Accounts¶
Start by creating Account Types, which determine the kind of account and the way in which accounts will be treated at financial year closing.
To add, modify or delete existing account types, go to the menu Accounting ‣ Configuration ‣ Financial Accounting ‣ Accounts ‣ Account Types.
The fields used to define an account type are the following:
Account Type: the name of the account type.
Code: the code of the account type.
PL/BS Category: this category determines where in a report the account will be printed (i.e. Balance Sheet and Profit and Loss). There are five types you can use: No type at all (/), Balance Sheet (Assets Accounts = active), Balance Sheet (Liabilities Accounts = passive), Profit & Loss (Income) and Profit & Loss (Expense).
Deferral Method: this field indicates how and whether the account will be transferred at financial year closing.
None means that the account will not be transferred. Typically used for profit and loss accounts.
Balance means that the account balance will be transferred at year closing. Typically used for balance sheet accounts.
Detail means that every single entry will be transferred to the next financial year.
Unreconciled means that only unreconciled (outstanding) entries will be transferred to the next financial year. Typically used for centralisation accounts.
Sign on Reports: this field allows you to reverse the sign of accounts, such as Income accounts being printed positive instead of the default negative. Use Reverse balance sign to accomplish this.
Use the View type for accounts that make up the structure of the charts and have no account data inputs of their own.
To add, modify or delete existing accounts, use the menu Accounting ‣ Configuration ‣ Financial Accounting ‣ Accounts ‣ Accounts.
The main account fields are:
Name: the account name.
Code: the code length is not limited to a specific number of digits. Use code 0 to indicate the root account.
Parent: determines which account is the parent of this one, to create the tree structure of the chart of accounts.
Internal Type: internal types have special effects in OpenERP. By default, the following types are available: View can be used to create a hierarchical structure for your accounts (grouping), Regular any account that does not fit into one of the other types; most of the accounts will have this type, Receivable - Payable: these types are used to indicate the centralisation accounts (for customers and suppliers) that will be set for each partner, Liquidity used to indicate financial accounts (bank and cash accounts), Consolidation to create a virtual (or consolidation) chart of accounts, Closed to indicate accounts that are no longer used.
Account Type: it is important to select the corresponding account type, as explained above. This will have an impact at year closing and also when printing reports.
Secondary Currency: forces all the moves for this account to have this secondary currency. Note that you can also define exchange rates from the menu Accounting ‣ Configuration ‣ Miscellaneous ‣ Currencies.
Outgoing Currencies Rate: to be selected only when you add a secondary currency. You have two options for outgoing transactions: At Date or Average Rate. Incoming transactions are always calculated At Date, according to the date of the transaction.
Allow Reconciliation: determines if you can reconcile the entries in this account. Activate this field for receivable and payable accounts and any other account that need to be reconciled other than by bank statements.
Default Taxes: this is the default tax applied to purchases or sales using this account. It enables the system to propose tax entries automatically when entering data in a journal manually.
The tree structure of the accounts can be altered as often and as much as you wish without recalculating any of the individual entries. So you can easily restructure your account during the year to reflect the reality of the company better.
You can have a look at active charts of accounts using the menu Accounting ‣ Charts ‣ Chart of Accounts, and Open Charts for the selected year, account moves and periods. Click an account to drill down to its details.
Most accounting software packages represent their charts of accounts in the form of a list. You can do this in OpenERP as well if you want to, but its tree view offers several advantages:
it lets you show in detail only the accounts that interest you,
it enables you to get a global view of accounts (when you show only summary accounts),
it is more intuitive, because you can search for accounts on the basis of their classification,
it is flexible because you can easily restructure them.
The structure of the chart of accounts is hierarchical, with account subtotals calculated from the View accounts. You can develop a set of view accounts to contain only those elements that interest you.
To get the details of the account entries that are important to you, all you need to do is click the account's code or name.
Displaying the chart of accounts can take several seconds, because OpenERP calculates the debits, credits and balance for each account in real time.
Virtual Charts of Accounts¶
The structure of a chart of accounts is imposed by the legislation in effect in the country concerned. Unfortunately, that structure does not always correspond to the view that a company needs.
In OpenERP, you can use the concept of virtual charts of accounts to manage several representations of the same accounts simultaneously. These representations can be shown in real time with no additional data entry.
So your general chart of accounts can be the one imposed by the statutes of your country, and your CEO can then have other virtual charts as necessary, based on the accounts in the general chart. For example, you can create a view per department, a cash-flow and liquidity view, or consolidated accounts for different companies.
The most interesting thing about virtual charts of accounts is that they can be used in the same way as the default chart of accounts for the whole organization. For example, you can establish budgets from your consolidated accounts or from the accounts from one of your companies.
Virtual accounts enable you to provide different representations of one or several existing charts of accounts. Creating and restructuring virtual accounts has no impact on the accounting entries. You can then use the virtual charts with no risk of altering the general chart of accounts or future accounting entries.
Because they are used only to get a different representation of the same entries, they are very useful for:
consolidating several companies in real time,
reporting to a holding according to their chart of accounts,
getting more useful views than those imposed,
presenting summary charts to other users that are appropriate to their general system rights.
So there are good reasons for viewing the impact of financial transactions through virtual charts, such as budgets and financial indicators based on special views of the company.
To create a new chart of accounts you should create a root account using the menu Accounting ‣ Configuration ‣ Financial Accounting ‣ Accounts ‣ Accounts. Your top level account should have a name, a code (different from any other code in your current chart), an Internal Type and Account Type View. Then you can choose your structure by creating other accounts of Account Type Viewas necessary. The Internal Type should be of the Consolidation type if you want to map accounts. Check your virtual structure using the menu Financial Management ‣ Charts ‣ Charts of Accounts and select the corresponding chart in the drop-down list at the top of the screen.
To be able to map your virtual chart of accounts to your general chart of accounts, you have to set Internal Type as Consolidation. From the Consolidated Children you can then map accounts or make accounts consolidate. In the Consolidated Children, you can add View accounts or normal accounts. If you add a View account to the consolidated children, OpenERP will automatically include all existing and future linked accounts.
You can then run reports such as Trial Balance and General Ledger for both your general chart of accounts and your virtual chart(s) giving you another representation of the company. All the actions and states in your general account are also available in the virtual accounts.
Finally, you can also make virtual charts of accounts from other virtual charts. That can give an additional dimension for financial analysis. You can create an unlimited number of virtual (consolidation) charts of accounts.