Bank reconciliation

Bank reconciliation is the process of validating bank transactions. Many of these transactions are matched with counterpart items related to business records such as customer invoices, vendor bills, and payments, while others that may not have a matching counterpart item (such as bank fees) can be written off manually or with reconciliation models. Not only is bank reconciliation compulsory for most businesses, but it also offers several benefits, such as reduced risk of errors in financial reports, detection of fraudulent activities, and improved cash flow management.

Thanks to the default matching rules and customizable bank reconciliation models, Odoo selects the matching items automatically when possible.

See also

• Odoo Tutorials: Bank reconciliation

• Bank synchronization

• Transactions

Bank reconciliation view

To access a journal’s Bank Matching view, go to the Accounting Dashboard and either:

• click the journal name (e.g., Bank) or its Transactions button to display all transactions, including those previously reconciled, or

• click the x to reconcile button to display only unreconciled transactions. To include previously reconciled transactions, remove the Not Matched filter from the search bar.

The Bank Matching view is composed of lines for each transaction of the journal with the newest displayed first. Each transaction has a date, a label, a partner (if set), action buttons, and the transaction amount. Each line can be expanded to show additional information and buttons.

Note

Once a transaction is reconciled, the suggested action button(s) is replaced with the counterpart entry/entries it was matched with or the account(s) it was written off to.

Transactions

Every transaction is linked to a journal entry that debits/credits the journal’s main account and its suspense account until it is fully reconciled. At that point, the suspense account is replaced with the account of the counterpart item or, in the case of manual matching, the selected account.

Possible action buttons

Up to two suggested action buttons are available as primary buttons, but all available action buttons are displayed when the transaction is expanded. The following action buttons are available depending on the details of the transaction:

• Set Partner: Open a search view to add a partner to the transaction.

• Set Account: Open a search view to manually select an account to write off the full amount of the transaction with this account. If necessary, edit the line to change the amount.

• Receivable: Write off the transaction to the receivable account of the partner.

• Sales: Open a list view of sales orders belonging to the transaction’s Partner (or proceed directly to the form view if only one relevant sales order exists). Select the relevant sales order(s) and click Create Invoices, then return to the Bank Matching view and match the invoice(s) using the Reconcile action button.

• Payable: Write off the transaction to the payable account of the partner.

• Reconcile: Open a search view of existing items from records such as customer invoices, vendor bills, and payments. Select one or multiple items to add counterpart items with the corresponding accounts of those items.

• Batches: Open a short list of batch payments. To view all batch payments, click Search More …. Select a batch payment to add a counterpart item for each payment of the batch with the corresponding account of each payment.

• Reconciliation models: Each manual reconciliation model that could apply to the transaction is displayed. Click the reconciliation model’s action button to generate the counterpart items defined on the reconciliation model.

Note

To remove the partner from a transaction, click the (close) icon next to the partner’s name.

Click the (chevron down) button next to the possible action buttons of an expanded line to display any of the above action buttons that are hidden due to space limitations, as well as the following:

• Upload bills: Upload one or more bills to be digitized. After digitization, the bills are available for matching via the Reconcile action button.

• Manage Models: Open the list view of Reconciliation models.

• Open Journal Entry: Open the journal entry of this transaction.

• Delete Transaction: Delete this transaction.

Note

Uploading bills from the Bank Matching view does not automatically reconcile them with the active transaction.

See also

In-app purchases (IAP)

Reconcile transactions

When possible, Odoo automatically reconciles transactions based on their fields.

If no partner is set on the transaction, the transaction’s Label is compared with the Number, Customer Reference, Bill Reference, and Payment Reference of existing invoices, bills, and payments.

If a partner is set on the transaction, the transaction is instead matched with invoices, bills, and payments of the partner based on the Amount. The following rules are used in a sequential order to identify and apply a match:

• Exact match

• Discounted match: for payment terms with discounts for early payments

• Tolerance match: within 3% to account for merchant fees, rounding differences, and user errors

• Currency match: when the transaction is in a different currency than the invoice, bill, or payment (with a 3% tolerance for exchange rate differences)

• Amount in label: if the invoice Amount is found in the transaction’s Label

In addition to using these fixed matching rules, transactions can be matched automatically with the use of reconciliation models. Otherwise, reconcile transactions manually by following these steps:

1. Expand the desired line among unmatched bank transactions to display all available action buttons.

2. Define the counterpart. There are several options for defining a counterpart, including matching existing items, manually setting the account, matching with batch payments, and using reconciliation model buttons.

3. If the resulting entry is not fully balanced, add another existing counterpart item or write it off by setting the account of the remaining amount.

Existing items

To reconcile transactions with existing items related to records such as customer invoices, vendor bills, and payments, click the Reconcile action button, select the matching journal item(s) in the list, and click Select.

Note

If the Partner is set, this list is automatically filtered to only include items related to that partner.

Tip

Use the search bar within the Search: Journal Items to Match window to search for specific journal items.

If a transaction amount is lower than the invoice or bill it is reconciled with, the transaction is fully reconciled, but the difference remains open on the counterpart item. The remaining amount can be left open to be reconciled later or the invoice or bill can be marked as fully paid. To mark the invoice or bill as fully paid, edit the line, click fully paid, and Save. To reverse this, edit the line again, click partial payment, and Save.

If a transaction amount is greater than the invoice or bill it is reconciled with, the transaction is only partially reconciled. The remaining balance can be reconciled as any other transaction amount.

Note

Existing items of draft entries can be matched. Eventual automatic moves (like currency exchange or cash basis moves) are created in draft simultaneously with the reconciliation. Posting the original entry also posts the automatic move.

Set account

If no existing item matches the selected transaction, you can still write off the transaction manually: Click Set Account, then choose the appropriate account. To write off only part of the transaction, edit the line to reflect the correct value and reconcile the remaining amount as desired.

Tip

If the partner is set, write the amount off to their receivable or payable account directly by clicking the Receivable or Payable action button.

Reconciliation models

Use reconciliation models to create custom rules that can be applied automatically or manually via custom buttons for operations that are frequently repeated. These custom buttons allow you to quickly reconcile bank transactions manually and can also be combined with other reconciliation models and with counterpart items when reconciling transactions.

Example

An outgoing bank transaction for $103 is partially matched with a vendor bill for $100, leaving $3 of the transaction still unreconciled. Use the Bank Fees reconciliation model to create a new counterpart item for $3 and reconcile it with the remaining $3 of the bank transaction.

Edit lines and unreconcile transactions

To edit a counterpart item, expand the line, click the (pencil) icon, and edit the necessary fields in Edit Line window.

Note

When the counterpart item is an existing journal item, some fields are read-only.

If a transaction is partially matched with a counterpart item, use the link to mark the invoice as fully paid or to switch back to a partial payment.

To unreconcile a transaction, delete all counterpart items associated with the transaction by clicking on the (trash) icon.

Netting

Netting (also known as AP/AR offsetting) is the process of balancing incoming debts from and outgoing debts to the same partner. Reconciling the incoming and outgoing debts creates a new journal entry that balances the debts. Two main scenarios exist:

• A bank transaction balances (either fully or partially) the incoming and outgoing debts.

• No bank transaction balances the incoming and outgoing debts. This situation can occur either when the debts balance each other completely or when the debts remain unbalanced.

Netting with bank transactions

When a bank transaction balances (either fully or partially) the incoming and outgoing debts, reconcile the bank transaction from the Bank Matching view like any other existing items:

1. Click Reconcile on the transaction.

2. Select all the relevant counterpart items on both the payable and receivable side.

3. Click Select.

4. If a balance remains, depending on the details, the following situations are possible:

   • An invoice, bill, or other item is not fully reconciled, and the remaining balance can be reconciled with other bank transactions.

   • The bank transaction itself is not fully reconciled, and the remaining balance can be reconciled as in any other situation.

Netting without bank transactions

When no bank transaction balances the incoming and outgoing debts, there is nothing to reconcile from the Bank Matching view. However, the debt amount is visible in both the account receivable and the account payable. To balance these debts so that they no longer appear on the partner ledger, follow these steps:

1. Go to Accounting ‣ Accounting ‣ Reconcile.

2. Select the journal items that debit or credit the account receivable and account payable and represent the debts to be netted.

3. Click Reconcile.

4. If the debts don’t balance each other perfectly, a Write-Off Entry popup window appears, allowing you to decide how to resolve the remaining balance:

   • Select Allow partials to only partially reconcile the account receivable and account payable and leave the remaining balance open.

   • Use a reconciliation model button to write off the balance.

   • Manually choose an Account, and optionally adjust the Tax, Journal, Label, Date, and To Check fields.

The items are then matched, and their balance is removed from the partner ledger, representing that no payment is due for these debts.

Note

The workflow is the same whether there are only two equal debts in the receivable and payable accounts or multiple debts in each account.