The Cut-Off feature is a way to manage Vendor Bills and Customer Invoices where the expense or revenue spans a month.

The best example is your monthly Rent when it doesn't run from the 1st to the last of the month. You normally pay based on the date you sign the lease, and if you do then each Bill for rent should be booked into two months.

If your rent runs from the 15th to the 14th each month, if you enter a Vendor Bill for it without using the Cut-Off feature, your Income Statement will look like this:

The expense for rent is incorrect though (for this Bill) because $1,400 should be booked in April. What you want to do is move some of the rent to a liability account until you can post it the following month as an expense.

To handle this situation you would use the Cut-Off feature with a 50% percentage to have half of the rent expense moved to your Balance Sheet on the Bill date and moved back to your Income Statement on April 1st:

The portion of the expense you are cutting off will move on the same day as the original Bill and post the Adjusting Amount entered (you can specify either the % or the $) to the Accrued Account selected via an automatically created Journal Entry.

A second automatically created Journal Entry will be left in draft and set to automatically post the amount from the Accrued Account back to the Expense Account on the Bill (on the recognition date) so your Income Statement will at that time look like this:

This feature is a quick way to manage simple deferred revenues and expenses where they span two months - if they span more than two months you can leverage the standard deferred revenue and expense feature sets.

https://www.odoo.com/documentation/15.0/applications/finance/accounting/payables/supplier_bills/deferred_expenses.html

https://www.odoo.com/documentation/15.0/applications/finance/accounting/receivables/customer_invoices/deferred_revenues.html