Re: [Openerp-community] Seeking clarification on reconciliation functionality in 7.0

Mon, 21 Jan 2013 07:40:32 -0800

I'd like to echo/validate what Phil has stated. My company manages a handful of companies which are currently all using Quickbooks Online. We've out-grown it (too many customers/txns) and are looking for a new platform. OpenERP is awesome from a technical standpoint (Postges, XML-RPC, addons), but for US companies the lack of features such as account reconciliation are show-stoppers. We are perfectly willing to contribute to OSS, but when we're on such a crunched timeline to migrate we can't spend months implementing missing features and if we move to a different platform then there is no reason for us to contribute to one we aren't using.

The Quickbooks market (SMB) is enormous (larger than SAP in the US) despite their software being basically unchanged for 20 years. I see it as the single biggest opportunity for market-share gains for OpenERP's new hosted offering. But, there is no way it can topple Quickbooks without matching the basic functionality required for GAAP accounting. (OFX import would be nice too)

Alas, my company is still considering OpenERP for our new platform, but not 7.0. We are looking at 6.0 since the basic functionality we need doesn't appear to be present in newer versions but may be with the addition of some community modules for 6.0. I think community addons and customizability are great, but not when you have to use them to get your most basic feature-set. IMO the OpenERP 7.0 launch was premature and has therefore split the community between completing unfinished work on 6.x modules and porting/starting work to 7.0 leaving a huge gap in the interim. Waiting until 7.0 was 100% ready to launch and not disrupting the 6.x ecosystem would have been wise since companies like mine are left with a hard decision about jumping onto a platform that is already being abandoned or one that was "released" prematurely.

Thanks,
Colin

Sunday, January 20, 2013 8:31 AM


Why so complicated? The "things" that are reconciled against a bank statement aren't invoices, deposit tickets, etc. They are simply the debits and credits to the account, and OpenERP already has those.

One simply needs a dialog where one selects an account and enters a statement date and closing balance. The opening balance must be the sum of all credits and debits that have been previously reconciled through this mechanism. The user is then presented with a list of unreconciled debits and credits, and checks them off until adding or subtracting them to the sum makes the new balance equal to the closing balance, and the total debits and total credits equal to those two numbers on the statement. The reconciliation is then confirmed, and now all of these debits and credits that were checked are marked as reconciled. Some automated matching algorithm is useful, but by no means necessary. A great many (most, perhaps) companies reconcile from paper statements, around here.

The important point here is that there is _no other way_ than a bank statement reconciliation to set this flag on a credit or debit. Also, _accounts_ are reconciled, not journals, and _any_ account may be reconciled. It makes the most sense for credit cards and checking accounts, but there are times it is useful for even income and expense accounts.

It's typical for this statement reconciliation dialog to offer, in a small number of clicks, to create a new accounting record for amounts discovered on the statement that were not present in the company's records. So if I discover a deposit of $10, I can apply it to an invoice, or credit an interest income account. This seems to me to be a superset of the functionality offered by "Bank Statements" in 7.0.

Lastly, this doesn't replace the already present reconciliation of payments and invoices. There seems to be an understanding on this list that "reconciliation" means only that. I don't know if it's OpenERP terminology, or differing accounting jargon in other countries, or a translation of non-english terms that is causing the confusion here, but "to reconcile" has a broad meaning that doesn't apply to just one thing:

rec·on·cile
Verb
1. Restore friendly relations between: "she wanted to be reconciled with her father".
2. Cause to coexist in harmony; make or show to be compatible.

An accountant in the US will probably think of reconciling accounts to statements first, but would also understand reconciling payments to invoices. The two are not mutually exclusive: they are reconciling two entirely different things. I don't find the existing terminology confusing, but this missing functionality is a pretty big deal.

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Friday, January 18, 2013 10:36 PM
Hello,

We are aware that there is a limitation with OpenERP 7 on these operations.
We have identified it and we are working on it (no ETA though). We also
acknowledge that certain misleading terms might need to be changed in this
context. As you have pointed out, some process flows require 2 steps when
"reconciling". The first step reconciles customer invoices with customer
payments, and the 2nd step reconciles (or should I say "compares" or
"cross-checks") a bank statement that you create in OpenERP by importing
"things" with the paper statement you receive in the mail from your bank.

In OpenERP 6.1, these "things" can be:
- customer invoices, in which case a customer payment will be created and a
journal entry will take place at the time of import. This is done through
Accounting > bank & Cash > Bank statements, or
- customer payments. This is done through Accounting > Periodical processing
The problem is that it can be either one of these, not both on the same
view, which makes it impossible to compare the starting and ending balance
of the OpenERP statement vs. the paper statement if you are dealing with
both open invoices and posted payments.

In OpenERP 7.0, for some reason the import of customer payments has been
removed.

Also be aware that in OpenERP 6.1 and 7.0, the concept of deposit ticket for
customer payments doesn't exist. However it exists for supplier payments
but this is another topic. We have started a new module called
account_deposit that allows to manage deposit tickets for checks and cash,
or credit cards transaction batches. This is still in development stage and
the branch is here:
https://code.launchpad.net/~openerp-dev/openobject-addons/trunk-account_depo
sit-jam

In my opinion, we need to solve the following issues to have a working bank
statement reconciliation flow:
- introduce the concept of deposit ticket (with account_deposit).
- have only one view for the bank statements reconciliation that allows to
import open customer invoices, posted payments, or posted deposit tickets.
This view will allow to compare the starting and ending balances.
- probably improve the matching algorithm between the csv downloaded from
the bank website and the records in OpenERP (based on amounts comparison and
string distance).
- reuse the conflict management mechanisms of the interactive reconciliation
of the banking-addons (from http://www.youtube.com/watch?v=qJ5YYBJOeHM ).
- change the terms to make them more meaningful according to en_US
practices.

Best,
__
Fabrice Henrion
Director of Business Development Americas
OpenERP Inc.
260 Main Street - Suite 203
Redwood City, CA 94063
Tel: +1 (650) 307-6736
http://www.openerp.com


-----Original Message-----
From: [email protected]
[mailto:[email protected]] On
Behalf Of Phil Frost
Sent: Friday, January 18, 2013 10:55 AM
To: [email protected]
Subject: Re: [Openerp-community] Seeking clarification on reconciliation
functionality in 7.0

I thought it might help to have a specific example of the sort of error I'm
trying to catch. Say I invoice a customer for $100. Then, I receive a check
for $100 in the mail. I register a payment against the invoice, and now the
invoice is reconciled.

Later, I take that check to the bank. But, accidentally I write the amount
to deposit as "$10" instead of "$100" at the bank, but I enter the correct
amount of "$100" in our accounting system.

Now, my records don't match the bank records of the same account. How do I
audit the bank statement from the bank to catch this error?

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