Odoo Accounting - Profit & Loss and Balance Sheet Report

In any Accounting software, the most important financial reports are Profit & Loss (Income Statement) and Balance Sheet Report.

In the Odoo Community Edition V11 onward, you have to install these free accounting modules in order to have a working Accounting module and financial reports.

• Read this blog on how to use Analytic Account and Analytic tags to keep track of business expenses, cost and profits, by project, cost center or department.

• Read this blog on different options of doing bank reconciliation in Odoo.

• Read this blog on what are the features that are Nice-to-Have in Odoo CE Accounting.

• Read this blog on how the Sales and Purchase process is impacting Accounting in Odoo.

To configure the Profit & Loss and Balance Sheet report, go to the Accounting module -> Configuration -> Account Reports. This page is available after you installed the accounting_pdf_reports module.

Create the report items in the following screen. You may refer to the following section for the configuration, which is based on Account Type. The best practice is ensure that the Chart of Account is designed and structured correctly based on the Account Type.

Profit & Loss Reports

In the accounting, Profit & Loss report shows the REVENUE, EXPENSES and PROFIT (or LOSS) of the company, for a period of time. Unlike balance sheet, ending balance of the P&L for an accounting period, does not carried forward to the next accounting period.

The following is a typical P&L report format in Malaysia, which may varies depending on the country. You may see the configuration for your report, in the below.

Note: For P&L report, the start date in the report configuration should be from the start of fiscal year or based on the user selection.

REVENUE

a) Sales = Income (Account Type/Reverse balance sign)

EXPENSES

b) Cost of Goods Sold = Cost of Revenue (Account Type)

c) Gross Profit = Sales – Cost of Goods Sold (Account Type = Income + Cost of Revenue/Reverse balance sign)

d) Expenses = Expenses + Depreciation (Account Type)

PROFIT

e) Net Profit/(Loss) = Gross Profit – Expenses (Account Type = Income + Expenses + Cost of Revenue/Reverse balance sign)

For some companies, there could also be additional items for Taxation and Net Profit/(Loss) After Taxation.

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Balance Sheet Reports

Balance sheet shows the ASSETS that company OWNS, the LIABILITIES it OWES and the EQUITY that BELONGS to the owners, at a single point of time.

ASSETS = LIABILITIES + EQUITY.

This equation explains what are the sources of financing (bank loan, payable, capital, etc) to buy the Assets.

Any debit to the Asset will increase it and credit will decrease the Asset. On the other hand, any credit will increase the liabilities/Equities and debit will decrease it.

The connection between the P&L and BS report is that the Net Profit/(Loss) from the P&L will be part of the Equity in the BS report.

The following is a typical BS report format in Malaysia, which may varies depending on the country.

Note: For BS report, the start date in the report configuration should be from the beginning of the data is entered into the system.

ASSETS

a) Fixed Asset = Fixed Asset (Account type)

b) Current Asset = Receivable + Bank and Cash + Current Assets + Prepayment (Account Type)

c) Total Asset = Fixed Asset + Current Asset (Account type)

LIABILITIES

d) Current Liabilities = Payable + Current Liabilities (Account type)

e) Long Term Liabilities = Non-current Liabilities (Account type/Reverse balance sign)

f) Total Liabilities = Current Liabilities + Long Term Liabilities (Reverse balance sign)

EQUITIES

g) Equities = Equity (Account type)

h) Net Profit For the Period = Income + Expenses + Cost of Revenue + Current Year Earning /Reverse balance sign

i) Total Equity = Total Asset + Total Liabilities (Equity + Other Income + Income + Depreciation + Expenses + Cost of Revenue)

j) Total Liabilities + Total Equity = +(Total Liabilities) + Total Equity (Account type=Equity + Other Income + Income + Depreciation + Expenses + Cost of Revenue + Payable + Current Liabilities + Non-current Liabilities)

Note: To verify the correctness of the Balance Sheet, Total Assets (C) = Total Liabilities + Total Equity (J).

The Free version of the Accounting reports for Odoo CE are far from satisfying, e.g. not able to download to the Excel format, cannot view the report online, cannot drill down to the details level to the journal entries, cannot filter by analytic account & tag, etc.

Alternatively, the best paid Accounting reports module, so far that I've tested, for the Odoo Community Edition, which is almost equivalent to the EE version, is this Dynamic Financial Reports.

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