Migrating Opening Balances into Odoo

In order to move the GL Balances into Odoo from a legacy system the following procedure must be applied.

A new GL Account: “Opening Balance Equity” is required.

Opening Balance Equity is the account that is used for the other side of the entry when beginning balances are entered when setting up new accounts.

The following Account Journals must exist:

  • Opening Sales Journal
  • Opening Sales Refund Journal
  • Opening Purchase Journal
  • Opening Purchase Refund Journal

As suggested in the following link, in order to migrate the Accounts Receivable and Accounts Payable Open Items it is best if they are created as invoices.

When the load file is created, indicate the original invoice #, the customer and the open balance to-date, so that it will be easy for to later reconcile with payments received during 2015.

Normal customer invoice:
(AR Open Item Balance in legacy system >0):

  • Journal: Opening Sales Journal
  • Invoice date: the original invoice date
  • Invoice due date
  • Period: force to the period in which the invoice will be posted (e.g. 01/2015)
  • Account: AR account defined in the customer master data
  • Line items: One line item indicating as Account “Opening Balance Equity” and the total amount due.

At the time of approving the invoice a journal entry will be created with the following items:

  • Debit: AR account
  • Credit: Opening Balance Equity

Customer invoice refund:
(AR Open Item Balance in legacy system < 0)

  • Journal: Opening Sales Refund Journal
  • Invoice date: the original invoice date
  • Invoice due date
  • Period: force to the period in which the invoice will be posted (e.g. 01/2015)
  • Account: AR Account defined in the customer master data
  • Line items: One line item indicating as Account “Opening Balance Equity” and the total amount due.

At the time of approving the invoice a journal entry will be created with the following items:

  • Debit: Opening Balance Equity
  • Credit: AR Account

The Accounts Payable open items will be migrated as supplier invoices, indicating the original invoice #, the supplier and the open balance to-date, so that it will be easy  to later reconcile with payments made during 2015.

Normal supplier invoice:
(AP Open Item Balance in legacy system >0):

  • Journal: Opening Purchase Journal
  • Invoice date: the original invoice date
  • Invoice due date
  • Period: force to the period in which the invoice will be posted (e.g. 01/2015)
  • Account: AP account defined in the supplier master data
  • Line items: One line item indicating as Account “Opening Balance Equity” and the total amount due.

At the time of approving the invoice a journal entry will be created with the following items:

  • Debit: Opening Balance Equity (recorded in the invoice line item)
  • Credit: AP Account

Spplier invoice refund
(AP Open Item Balance in legacy system < 0):

  • Journal: Opening Purchase Refund Journal
  • Invoice date: the original invoice date
  • Invoice due date
  • Period: force to the period in which the invoice will be posted (e.g. 01/2015)
  • Account: AP account defined in the supplier master data
  • Line items: One line item indicating as Account “Opening Balance Equity” and the total amount due.

At the time of approving the invoice a journal entry will be created with the following items:

  • Debit: AP Account (recorded in the invoice header)
  • Credit: Opening Balance Equity (recorded in the invoice line item)

The Inventory is migrated by means of a physical inventory count. As the products in stock use real time inventory valuation,  the following Journal entry being created (one journal item for each product) when the physical inventory is posted:

  • Journal: Stock Journal
  • Debit: Stock Quantity * Average cost
  • Credit: Opening Balance Equity

When the other GL Account Balances are loaded, some weeks later, a single Journal entry will be created using the Opening Journal and .

The AR, AP and inventory balances need to be omitted, because they have already been loaded, and all the Balance Sheet GL account balances are entered using the ‘Opening Balance Equity’ as the contra GL account.

After this process, the Opening Balance Equity account should have the same balance as the Retained Earnings account in the legacy system.

Then a final journal entry needs to be created to distribute the remaining balance in the Opening Balance Equity account to the retained earnings.

2 comments

  1. Very good post. I think my accountants will like this one as we are going live shortly.

  2. can you please extend this article to have more specific example, like Creation of those Opening Sales amd Purchase Journals, example of one Invoice Entry (screenshots), and lastly the GL TB result,

    TIA

Leave a Reply

Your email address will not be published. Required fields are marked *