diff --git a/accounting/payables/supplier_bills.rst b/accounting/payables/supplier_bills.rst index 673c7342d..f11eaea4c 100644 --- a/accounting/payables/supplier_bills.rst +++ b/accounting/payables/supplier_bills.rst @@ -7,3 +7,4 @@ Vendor Bills supplier_bills/manage supplier_bills/bills_or_receipts + supplier_bills/deferred_expenses diff --git a/accounting/payables/supplier_bills/deferred_expenses.rst b/accounting/payables/supplier_bills/deferred_expenses.rst new file mode 100644 index 000000000..bb07bc092 --- /dev/null +++ b/accounting/payables/supplier_bills/deferred_expenses.rst @@ -0,0 +1,193 @@ +================================= +Deferred Expenses and Prepayments +================================= + +**Deferred expenses** and **prepayments** (also known as **prepaid expense**), are both costs that +have already occurred for unconsumed products or services yet to receive. + +Such costs are **assets** for the company that pays them since it already paid for products and +services still to receive or that are yet to be used. The company cannot report them on the current +**Profit and Loss statement**, or *Income Statement*, since the payments will be effectively +expensed in the future. + +These future expenses must be deferred on the company's balance sheet until the moment in time they +can be **recognized**, at once or over a defined period, on the Profit and Loss statement. + +For example, let's say we pay $ 1200 at once for one year of insurance. We already pay the cost now +but haven't used the service yet. Therefore, we post this new expense in a *prepayment account* and +decide to recognize it on a monthly basis. Each month, for the next 12 months, $ 100 will be +recognized as an expense. + +Odoo Accounting handles deferred expenses and prepayments by spreading them in multiple entries that +are automatically created in *draft mode* and then posted periodically. + +.. note:: + The server checks once a day if an entry must be posted. It might then take up to 24 hours before + you see a change from *draft* to *posted*. + +Prerequisites +============= + +Such transactions must be posted on a **Deferred Expense Account** rather than on the default +expense account. + +Configure a Deferred Expense Account +------------------------------------ + +To configure your account in the **Chart of Accounts**, go to :menuselection:`Accounting --> +Configuration --> Chart of Accounts`, click on *Create*, and fill out the form. + +.. image:: media/deferred_expenses01.png + :align: center + :alt: Configuration of a Deferred Expense Account in Odoo Accounting + +.. note:: + This account's type must be either *Current Assets* or *Prepayments* + +Post an expense to the right account +------------------------------------ + +Select the account on a draft bill +~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ + +On a draft bill, select the right account for all the products of which the expenses must be +deferred. + +.. image:: media/deferred_expenses02.png + :align: center + :alt: Selection of a Deferred Expense Account on a draft bill in Odoo Accounting + +Choose a different Expense Account for specific products +~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ + +Start editing the product, go to the *Accounting* tab, select the right **Expense Account**, and +save. + +.. image:: media/deferred_expenses03.png + :align: center + :alt: Change of the Expense Account for a product in Odoo + +.. tip:: + It is possible to automate the creation of expense entries for these products (see: + `Automate the Deferred Expenses`_). + +Change the account of a posted journal item +~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ + +To do so, open your Purchases Journal by going to :menuselection:`Accounting --> Accounting --> +Purchases`, select the journal item you want to modify, click on the account, and select the right +one. + +.. image:: media/deferred_expenses04.png + :align: center + :alt: Modification of a posted journal item's account in Odoo Accounting + +Deferred Expenses entries +========================= + +Create a new entry +------------------ + +A **Deferred Expense entry** automatically generates all journal entries in *draft mode*. They are +then posted one by one at the right time until the full amount of the expense is recognized. + +To create a new entry, go to :menuselection:`Accounting --> Accounting --> Deferred Expense`, click +on *Create*, and fill out the form. + +Click on **select related purchases** to link an existing journal item to this new entry. Some +fields are then automatically filled out, and the journal item is now listed under the **Related +Expenses** tab. + +.. image:: media/deferred_expenses05.png + :align: center + :alt: Deferred Expense entry in Odoo Accounting + +Once done, you can click on *Compute Deferral* (next to the *Confirm* button) to generate all the +values of the **Expense Board**. This board shows you all the entries that Odoo will post to +recognize your expense, and at which date. + +.. image:: media/deferred_expenses06.png + :align: center + :alt: Expense Board in Odoo Accounting + +What does "Prorata Temporis" mean? +~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ + +The **Prorata Temporis** feature is useful to recognize your expense the most accurately possible. + +With this feature, the first entry on the Expense Board is computed based on the time left between +the *Prorata Date* and the *First Recognition Date* rather than the default amount of time between +recognitions. + +For example, the Expense Board above has its first expense with an amount of $ 70.97 rather than +$ 100.00. Consequently, the last entry is also lower and has an amount of $ 29.03. + +Deferred Entry from the Purchases Journal +----------------------------------------- + +You can create a deferred entry from a specific journal item in your **Purchases Journal**. + +To do so, open your Purchases Journal by going to :menuselection:`Accounting --> Accounting --> +Purchases`, and select the journal item you want to defer. Make sure that it is posted in the right +account (see: `Change the account of a posted journal item`_). + +Then, click on *Action*, select **Create Deferred Entry**, and fill out the form the same way you +would do to `create a new entry`_. + +.. image:: media/deferred_expenses07.png + :align: center + :alt: Create Deferred Entry from a journal item in Odoo Accounting + +Deferred Expense Models +======================= + +You can create **Deferred Expense Models** to create your Deferred Expense entries faster. + +To create a model, go to :menuselection:`Accounting → Configuration --> Deferred Expense Models`, +click on *Create*, and fill out the form the same way you would do to create a new entry. + +.. tip:: + You can also convert a *confirmed Deferred Expense entry* into a model by opening it from + :menuselection:`Accounting --> Accounting --> Deferred Expenses` and then, by clicking on the + button *Save Model*. + +Apply a Deferred Expense Model to a new entry +--------------------------------------------- + +When you create a new Deferred Expense entry, fill out the **Deferred Expense Account** with the +right recognition account. + +New buttons with all the models linked to that account appear at the top of the form. Clicking on a +model button fills out the form according to that model. + +.. image:: media/deferred_expenses08.png + :align: center + :alt: Deferred Expense model button in Odoo Accounting + +Automate the Deferred Expenses +============================== + +When you create or edit an account of which the type is either *Current Assets* or *Prepayments*, +you can configure it to defer the expenses that are credited on it automatically. + +You have three choices for the **Automate Deferred Expense** field: + +#. **No:** this is the default value. Nothing happens. +#. **Create in draft:** whenever a transaction is posted on the account, a draft *Deferred Expenses + entry* is created, but not validated. You must first fill out the form in + :menuselection:`Accounting --> Accounting --> Deferred Expenses`. +#. **Create and validate:** you must also select a Deferred Expense Model (see: `Deferred Expense + Models`_). Whenever a transaction is posted on the account, a *Deferred Expenses entry* is + created and immediately validated. + +.. image:: media/deferred_expenses09.png + :align: center + :alt: Automate Deferred Expense on an account in Odoo Accounting + +.. tip:: + You can, for example, select this account as the default **Expense Account** of a product to + fully automate its sale completely. (see: `Choose a different Expense Account for specific + products`_). + +.. seealso:: + * :doc:`../../others/configuration/account_type` \ No newline at end of file diff --git a/accounting/payables/supplier_bills/media/deferred_expenses01.png b/accounting/payables/supplier_bills/media/deferred_expenses01.png new file mode 100644 index 000000000..17848259d Binary files /dev/null and b/accounting/payables/supplier_bills/media/deferred_expenses01.png differ diff --git a/accounting/payables/supplier_bills/media/deferred_expenses02.png b/accounting/payables/supplier_bills/media/deferred_expenses02.png new file mode 100644 index 000000000..106f2ba89 Binary files /dev/null and b/accounting/payables/supplier_bills/media/deferred_expenses02.png differ diff --git a/accounting/payables/supplier_bills/media/deferred_expenses03.png b/accounting/payables/supplier_bills/media/deferred_expenses03.png new file mode 100644 index 000000000..c68f476c2 Binary files /dev/null and b/accounting/payables/supplier_bills/media/deferred_expenses03.png differ diff --git a/accounting/payables/supplier_bills/media/deferred_expenses04.png b/accounting/payables/supplier_bills/media/deferred_expenses04.png new file mode 100644 index 000000000..03afc1f1f Binary files /dev/null and b/accounting/payables/supplier_bills/media/deferred_expenses04.png differ diff --git a/accounting/payables/supplier_bills/media/deferred_expenses05.png b/accounting/payables/supplier_bills/media/deferred_expenses05.png new file mode 100644 index 000000000..b2f769446 Binary files /dev/null and b/accounting/payables/supplier_bills/media/deferred_expenses05.png differ diff --git a/accounting/payables/supplier_bills/media/deferred_expenses06.png b/accounting/payables/supplier_bills/media/deferred_expenses06.png new file mode 100644 index 000000000..bd00811b5 Binary files /dev/null and b/accounting/payables/supplier_bills/media/deferred_expenses06.png differ diff --git a/accounting/payables/supplier_bills/media/deferred_expenses07.png b/accounting/payables/supplier_bills/media/deferred_expenses07.png new file mode 100644 index 000000000..40a76757b Binary files /dev/null and b/accounting/payables/supplier_bills/media/deferred_expenses07.png differ diff --git a/accounting/payables/supplier_bills/media/deferred_expenses08.png b/accounting/payables/supplier_bills/media/deferred_expenses08.png new file mode 100644 index 000000000..080e88028 Binary files /dev/null and b/accounting/payables/supplier_bills/media/deferred_expenses08.png differ diff --git a/accounting/payables/supplier_bills/media/deferred_expenses09.png b/accounting/payables/supplier_bills/media/deferred_expenses09.png new file mode 100644 index 000000000..76acbca62 Binary files /dev/null and b/accounting/payables/supplier_bills/media/deferred_expenses09.png differ