Odoo 16 Community Book

Cutoff Journal

You can define the Cutoff date as the break-off of the deadline of any bill, invoice or agreement that delineates when there are more business transactions to be registered in the following reporting period. Sometimes, the invoices and payments which are not approved or fully matched cannot be recorded in the accounts added in Odoo. In such cases, the company must ensure whether the liability or expense has been incurred at the end of every accounting period.

Let’s check the Cut-Off feature available in Odoo through an example. Imagine, a customer made a payment of 75% of the amount mentioned in the invoice. You can make corresponding changes in the journal entries using the Cut -Off option available in the bill as shown below.

As we mentioned above, the customer paid only 75% of the amount. The balance amount will be recorded in the company loss account. This can be recorded in the loss account using the Cut-Off button.

You will get a pop-up window here where you can adjust the journal entry. You can mention the remaining 25% in the Adjusting Amount field. These types of adjustment entries are required to record the liabilities and expenses in the financial statements of your company at the end of the accounting period. We use the Cut-Off feature to make adjustment entries. After mentioning the Adjustment Amount, Accrued Account, and Journal, you can click on the Create Journal Entries button.

The generated entries are shown in the screenshot above.