Invoices (Customer and Supplier), Accounting Vouchers and its Reconciliation in OpenERP

What is Reconciliation in OpenERP:

When a customer or supplier invoices is created in openerp, the state of these invoices are open. This open state means;

• Supplier Invoices in open State: No payment is paid to supplier so far.
• Customer Invoices in open state: No payment is received from customer so far.

Assume we have enter a payment voucher for a supplier invoice or similarly we have enter a receipt voucher for a customer invoice. In this case these invoices are still represented as open state in openerp system and customer will receive a reminder letter.

A method to inform openerp system that on behave of supplier invoice or customer invoice, openerp system paid(payment voucher) or receipt(receipt voucher) amount. This process is called reconciliation between invoices and accounting vouchers. Remember when you reconcile  invoice with voucher, the invoice state will be done from state open.

Let me give an example

Supplier Invoice and Reconciliation example in Openerp:

We enter an supplier invoice

Purchase Voucher (Impact of Supplier invoice) 1
id	accounts	Partner	debit	credit	state
1	Purchases	Dawood & Co	1000		Open
2	Acc Payable	Dawood & Co		1000

Now After a week we enter a Bank Payment Voucher

Bank Payment Voucher 2
id	accounts	Partner	debit	credit	state
3	Acc Payable	Dawood & Co	1000		valid
4	Bank Acc	Dawood & Co		1000

Still openerp system still treat the supplier invoice as unpaid invoice (because state is open). When we reconcile the supplier invoice and with bank payment voucher the state of invoice will be set to done. Remember reconciliation in openerp means reconcile the invoice lines and bank payment lines. In above supplier invoice reconcile example; line id 2 will be reconcile with line id 3 and status will be set of supplier invoice as done.

Purchase Voucher (Impact of Supplier invoice) 1
id	accounts	Partner	debit	credit	state
1	Purchases	Dawood & Co	1000		done
2	Acc Payable	Dawood & Co		1000

Customer Invoice and Reconciliation example in Openerp:

We enter an Customer invoice

Sale Voucher (Impact of Customer invoice) 3
id	accounts	Partner	debit	credit	state
5	Acc Receivable	Naeem & Co	1000		Open
6	Sales	Naeem & Co		1000

Now After a week we enter a Bank Receipt Voucher

Bank Receipt Voucher 4
id	accounts	Partner	debit	credit	state
7	Bank Acc	Dawood & Co	1000		valid
8	Acc Receivable	Dawood & Co		1000

Still openerp system still treat the customer invoice as un-receipt invoice (because state is open). When we reconcile the customer invoice and with bank receipt voucher the state of invoice will be set to done. Remember reconciliation in openerp means reconcile the invoice lines and bank receipt lines. In above customer invoice reconcile example; line id 5 will be reconcile with line id 8 and status will be set of customer invoice as done.

Sale Voucher (Impact of Customer invoice) 3
id	accounts	Partner	debit	credit	state
5	Acc Receivable	Naeem & Co	1000		done
6	Sales	Naeem & Co		1000

Note:

in above example we actually reconcile to accounts.

• In supplier invoice example: Acc Payable credit side is reconcile with the debit entry of same Acc payable .
• In customer invoice example: Acc Receivable debit side is reconcile with the credit side of same Acc Receivable.

This account level reconciliation is only possible, when you set these both account as reconcile. We can set the property of account from Financial Management → Configuration → Financial Accounting → Financial Accounts → Select Acc Payable Account in form view → select reconcile check box → save. Similarly any account will be reconcile when its reconcile option is checked.

Methods of payment and its reconciliation in openerp:

Openerp provide three form to enter account payment voucher or receipt voucher on behave of supplier invoice and customer invoice. What ever methods you used for entering accounting voucher, you also have available the reconciliation method. Below are three methods.

1. Entries Encoding by move (Manual reconciliation and automatic reconciliation methods are available)
2. Entries by Statement (entry time reconciliation method is available)
3. Direct payment or receipt from invoice (automatic reconciliation will be done)