Accounting Types
The two main types of accounting practiced widely are the continental accounting and anglo saxon accounting. Continental type of accounting is the most used type of accounting, Anglo saxon type on the other hand is mainly used by the small communities.By default the Odoo uses continental type of accounting. You can enable the anglo saxon type of accounting from the Accounting module settings. The continental type of accounting the amount of the goods is recorded as soon as the product is received in the stock, where on the other hand in an anglo saxon type of accounting the cost of the goods is recorded at the time of sale or delivery.
To switch to anglo saxon type of accounting, first select the Settings option from the Configuration tab of the Accounting module. Under the Accounting menu you can enable Anglo saxon Accounting. By saving the changes, your further accounting will be executed in the anglo saxon type.
In Continental type of accounting the cost of goods and services is taken into account when the product is received in the stock. In the case of Anglo Saxon type of accounting the cost is recorded as expense only when the goods is invoiced to a final customer.
Accrual and Cash Basis Accounting
Accrual basis accounting and Cash basis accounting are two types of mainly used accounting in businesses. The difference between these two is the timing when expenses and revenues are documented. In Accrual basis accounting the revenue and expenses are documented as soon as they occur. On the other hand during cash basis accounting the revenues and expenses are documented after the cash is exchanged. While comparing the cash basis accounting seems to be easier. But in the case of accrual basis, you will get a more clear picture of the company’s financial health.In Odoo you can track the cash basis and accrual basis accounting from the reports. While going through the reports you can select the cash basis method from the Options and view those transactions alone