Ledger Posting and Anglo-Saxon Accounting in Odoo17

Another accounting method in odoo is Anglo Saxon, which uses the revenue cost after the product is sold. Anglo-Saxon accounting is offered in the Enterprise version.

This accounting type comes into role in some situations say, one company purchases a lot of materials or items which is to be used in production or sale. If we are taking the income statement at this point it will indicate that the company owes a huge amount to its suppliers and thereby shows that it is losing more money. In such cases by using Anglo-Saxon, the expenses are only accounted for once the material purchased is either used in production or sold.

The first thing to be configured while using this accounting type should be enabling the provision by going to the Accounting Module.

As discussed, here the expenses are accounted for upon the sales of the product, until then they will be considered Assets… So it’s a must to automate the Inventory Valuation.

Additionally costing method FIFO(First in First Out) or AVCO is to be configured.

Let’s create a PO and go through the process.

As soon as the stock is delivered, it will be noted in the “stock input account,” raising the value of the already-existing stock.

The stock journal will look like the below image.

The nature of the stock will be a liability and the asset-liability chart will determine the account getting debited and credited whenever the asset value changes. By now the stock interim received account is credited and the stock valuation account is debited. If Assets are increased, the stock valuation account will be debited. Asset-liability charts show that when accounts are credited for income and liabilities and debited for expenses and assets, the account is credited.

The next action that affects the accounting ledger will be the Purchase order bill.

As a result, the account for interim stock receipts is debited rather than the expense account. Rather than having the expense recorded in the ledger, the acquired item is recognized as an asset.

The stock interim account is debited with the tax paid. A liability is created when the buyer is obligated to pay the seller, and a credit is created when liability rises.

Let’s now go to the Sales operation, where some of the purchased goods are sold. Here the expense is not accounted, rather it is shown as an asset when purchased.

In a sale activity, the account is debited when the responsibility diminishes and the liability is settled. The account used will be of type Asset. The asset value of the account decreases when products that are sold out are no longer available, reducing the value of the current stock.

The sale value is $1198 and as soon as you receive the invoice for the order, it will be posted, and the expense will be noted under the heading “Expenses.”

The income account” Product sales” is credited when income rises. Stock interim delivered account is recorded as an asset. This results in the expense account being debited (expense increases) and the stock account being credited immediately. The expense is now entered into the system.

The accounts receivable will be debited as it grows. The remaining procedure will resemble the same as continental accounting.

So conclusion, in Anglo-Saxon accounting, the product will be considered as an asset unless it is consumed for operations like production and sale.