Posted in Accounting, Open Source, OpenERP

How to create Opening Balance for new year in OpenERP?


At the end of a financial year, you will have to transfer the closing balance of current year as an opening balance to the new financial year.

You have to do following steps to achieve this.

First create new financial year (In our example, we are using 2012 as our running fiscal year).

Now create an account for opening balance.

You have to take care before selecting account type more specifically the Deferral Method. It determines whether and how account entries will be transferred to the new financial year. There are following types of deferral methods:

Deferral Method    Action
None               Nothing will be transferred (typically P&L accounts)
Balance            Account balance will be transferred 
                   (typically Balance Sheet accounts)
Detail             All entries are transferred, also reconciled entries
Unreconciled       Only entries that are not reconciled on the first day 
                   of the new financial year will be transferred 
                   (typically receivable and payable)

Define journal for opening balance.

Make entries for opening balance in that journal.

It will automatically generate the opening entries based on information provided in following wizard.

In the wizard, enter the financial year for which you want to transfer the balances (Fiscal Year to close). Select the New Fiscal Year (the year in which you want to generate the opening entry). You have to select the journal and the period to post the opening entries. Enter description for the opening entry such as Opening Entry for year YYYY. After that click on the Create button to generate the opening entry according to the settings defined.

Just look at the draft opening entry that has been generated. Open record which has state ‘Unposted’. Click on Post button to confirm the entry.

Now we have to close previous fiscal year as we do normally.

Further more, we can check in Chart of Account for all entries which we have created to varify.

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Specialised in OpenERP/CRM Solutions, software development, Web development, E commerce solutions & other open source solutions.

6 thoughts on “How to create Opening Balance for new year in OpenERP?

  1. Thanks. i need some clarification. Suppose i have to create on captial account (i.e Company owner) for entering inital investment. I made a journal entries Dr to cash account and cr from owner acc in openerp v7. Is it right? If wrong means kindly give the solutions…

  2. Can I use closing balance from one database as opening balance in new database? what will be the steps, I tried but couldn’t find the correct values.

  3. I have, what I think is, a simple question which I hope someone can help me with.

    – I have followed your instructions step by step, the numbers in my opening entries (accounts) are correct, but I do not understand the amounts in the credit centralisation (I created – opening expense account) and debit centralisation (I created – opening income account). Can you explain how odoo comes up with these amounts and what the reason for them are?

    Thanks

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