Financial Accounts
When we make a purchase we don’t want it to automatically be expensed (which is what happens by default). Instead, we need an account in which we will value goods that have been bought, but not delivered yet. We’ll call this account “Goods in Transit.” We will need another account (or multiple accounts) in which we will value goods in stock. This account will be called “Stock.” OpenERP is flexible enough that we can have one account for all stock, multiple accounts based on the product or the product category, multiple accounts based on the location of the stock, or a combination of all of these. To keep things simple we will simply have one “Stock” account for all our products. Lastly, we need an account to value the cost of goods sold when we actually sell the items.
Here are the financial accounts we will create:
- Stock
- Account No: 230200
- Internal Type: Regular
- User Type: Asset
- Cost of Goods Sold
- Account No: 510100
- Internal Type: Regular
- User Type: Expense
Configuring Stock Properties
Your first stop in configuring products properly is “Product Category” configuration. You will need to enable real-time stock valuation on the product itself. This will open up the list of product categories. By default there are only two to begin with. Open the “All Products / Saleable” record. Edit the following fields:
- Stock Input Account – “230200 Stock”
- Stock Output Account – “510100 Cost of Goods Sold”
- Stock Valuation Account – “230200 Stock”
Now, any products you add under the “All Products / Saleable” category (or its children) will automatically be valued in the right financial accounts. That is, when you make a purchase accounting entries will be created in the “Goods in Transit” asset account. When the shipment is received that balance will be transferred from “Goods in Transit” to “Stock”, and when you sell it the cost price of the goods will be reflected in the “Cost of Goods Sold” expense account.
