What is Two steps reconciliation?

Video

1. This means the user creates a vendor bill or customer invoice and reconciles the payment directly with the bank statement.
2. In this case, there is no payment journal entry.
3. The bank statement reconciles with account receivable or account payable.

Caution

• If the user follows this route, please do not click on ‘Pay’ on the invoice as it doesn’t generate any journal entry nor update the aged receivable/ payable report.
• Don't create the outstanding receipt/ outstanding payment account to associate to the bank journal.

Two steps reconciliation workflow

1. Create a vendor bill $333
2. We pay the vendor via check
3. After the vendor deposits the check, we can see the bank shows a line of negative $333
4. Add a bank statement line negative 333. It is a journal entry that Credit Bank account and Debit Bank suspense accounts.
   
5. After reconciling the bank statement -$333 with vendor bill ‘account payable’, the same journal entry becomes Credit Bank account and Debit Account payable.
   
   Note that in the two steps, Odoo change the 'Bank suspense' to 'Account payable' account.
   
   
   
6. Now the Account payable is reconciled with the vendor bill on the Credit side.

What is Three steps reconciliation?

Video

1. This means the user creates a vendor bill or customer invoice. Click on ‘Pay’ from the bill or invoice. 
2. ‘Pay’ button triggers the creation of a payment journal entry. 
3. The bank statement reconciles with the ‘outstanding’ account. The user can define the account under each bank or credit card journal

4. The outstanding account is usually a ‘current asset’ or ‘current liability’ type of account that ‘allow reconciliation’

Caution

If the user takes this path, they can choose to click the 'pay' button on the invoice or not. Clicking 'pay' means we will go through a three-step process. If they skip the 'pay' button, it will default to a two-step process.

Three steps reconciliation workflow

1. Create a vendor bill $222
2. We pay the vendor via check
3. Click on ‘pay’ on the vendor bill. Choose the bank journal with a ‘check’ payment method.
   This step triggers a payment entry creation that is Debit Account payable and Credit Outstanding payment account.
4. At this point, the account payable is reconciled and removed from the aged payable report.
   
   
   
5. After the vendor deposits the check, we can see the bank shows a line of negative $222
6. Add a bank statement line negative 222. It is a journal entry about Credit Bank account and Debit Bank suspense accounts.
   
7. After reconciling the bank statement -$222 with vendor payment ‘outstanding payment’, the same journal entry becomes Credit Bank account and Debit Outstanding payment.
   
   Note that in the three step, the reconciliation change the 'Bank suspense' to 'Outstanding payment' account.
   
   
   

Now the Outstanding payment account is reconciled between a bank statement and vendor payment.