Home > Financial Accounting, OpenERP > Hierarchy and Nature wise classification of Accounts (Chart of Account) in open ERP:

Hierarchy and Nature wise classification of Accounts (Chart of Account) in open ERP:

Open “List of Account” from Financial Management > Configuration > Financial Accounting > Financial Accounts> List of Accounts. It will show the list of account created for a company.

For creating new account in a company’s chart of Account, press Ctrl + N or new button from toolbar. It will show interface having some
attributes.

I am going to discuss the three attributes of account that helps in maintaining the Hierarchy and nature wise classification of Account.

These attributes are:

1.

  1. Parent
  2. 2. Account Type
  3. 3. Internal Type

I will explain the above attributes, using an example.

Example:

A company ABC Ltd chart of Account as follows:

Account Code

Account Name

0

ABC Ltd Chart

01

Balance sheet Statement

011

Fixed Assets

0111

Building

012

Current Assets

0121

Cash In Hand

0122

Cash At Bank

0123

Debtors

013

Liabilities

0131

Creditors

02

Profit and Loss

021

Income

0211

Sale

022

Cost of Goods Sold

0221

Purchases

023

Expenses

0231

Salaries

0232

Other Expenses

Hierarchal and Nature wise classification of above chart of account after analysis according to open erp is:

Account Name

Parent

Account Type

Internal Type

ABC Ltd Chart

Null

view

View

Balance sheet Statement

ABC Ltd Chart

view

View

Fixed Assets

Balance sheet Statement

Asset

View

Building

Fixed Assets

Asset

Others

Current Assets

Balance sheet Statement

Asset

View

Cash In Hand

Current Assets

Asset

Others

Cash At Bank

Current Assets

Asset

Others

Debtors

Current Assets

receivable

Receivables

Liabilities

Balance sheet Statement

payables

View

Creditors

Liabilities

payables

Payables

Profit and Loss

ABC Ltd Chart

view

View

Income

Profit and Loss

income

View

Sale

Income

income

Others

Cost of Goods Sold

Profit and Loss

costofgoodsold

View

Purchases

Cost of Goods Sold

costofgoodsold

Others

Expenses

Profit and Loss

expense

View

Salaries

Expenses

expense

Others

Other Expenses

Expenses

expense

Others

1. 1. Internal Type: These are the static
values supplied by open ERP; this field is used to recognize the nature as these
names shows there meanings:

View> Account
having Internal Type ‘View’ will not use in direct voucher posting, means when
we will enter a JV from open ERP then selection of account from list dialog box
will not show the account having internal type view.

Others> other then
Receivables, Payables and views all the account’s internal type will be others in
above example, means when we will enter a JV from open ERP then selection of
account from list dialog box will only show other then View internal type
accounts.

Receivables> All
those Account that allow effects in voucher entry, and relates to company Receivables
will have its internal type Receivables.

Payables> Same as above but in this case issue relates to company
payables.

2. 2. Parent Type: This attributes gives the Hierarchy
wise classification of chart of Account. First parent accounts have the null value,
and all the descendent account have the parents like above example.

3. 3. Account Type: This helps the basic
account nature wise classification; like Assets, Capital, Liabilities, Expense,
Income and Cost of Goods Sold. These are not provided by open ERP by default,
we have to provide these types of accounts. You can enter the Account Type from
Financial Management> Configuration> Financial Accounting> Financial
Accounts> Account Types.

  1. October 7, 2010 at 12:50 pm

    Hi Mohsin, thanks for your post, i search info about how start form zero with openERP and it’s only few.

    May you write some about “Developing a Real case from zero”. I begin with “Developing a Real Case” of the OpenErp book, but i stop in the jornal creation at 7.5.2 Configuring Journals.

  2. October 9, 2010 at 6:15 am

    thanks @milton.
    ok soon i will write single tutorial for you, about how to configure journals of openerp. hope this will be a useful link for u.
    and as u asking for real case. its very difficult to cover all the topics of how to deploy a real problem in openerp using the medium of blogs.
    i will try to introduce those topics which will helpful to take a start in openerp.

  3. November 8, 2010 at 6:39 pm
  4. July 6, 2011 at 3:20 am

    Excellent work here. Using it to refresh and improve my knowledge of OpenERP. Well done.

  5. November 2, 2012 at 8:40 am

    Thanks Mohsin, this is great, and very helpful. I have 1 question. How would you setup accum. depreciation for building or equipment. What will be the account type and internal type be?

  6. November 2, 2012 at 8:42 am

    Thanks Mohsin, this is great, and very helpful. I have 1 question. How would you setup accum. depreciation for building or equipment. What will be the account type and internal type be? ?

  7. February 24, 2014 at 1:57 pm

    Dear Mohsin,
    Great work, Please guide me about how to prepare a chart of accounts of a manufecturing co in open erp v6????? you can send me guideline at my email address too. your early response and cooperation in this regard will be highly appreciated

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