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Re: Financial Account for Discounts

by
Open For Small Business Ltd
- 10/13/2016 17:42:14
It is not easy, and the problem is far greater than just supplier invoices if you are subject to IFRS, specifically IAS2 Inventories, paragraph 11,

The costs of purchase of inventories comprise the purchase price, import duties
and other taxes (other than those subsequently recoverable by the entity from the
taxing authorities), and transport, handling and other costs directly attributable to
the acquisition of finished goods, materials and services. Trade discounts,
rebates and other similar items are deducted in determining the costs of purchase
.

So if you are likely to receive the discount you need to value stock as though the discount was already received.  We just wrote this for v7 and need to port to v10.  It took a good 3 weeks to get all tests passing.  We used hypothesis to generate test cases, and I'd say 1 week of that was actually bugs in account_anglo_saxon or stock modules (mostly not dealing with the 0.00 case correctly, or picking wrong accounts up in complex ops), but v7 out of support so we just fixed them.

The standard process is pretty easy, but then you need to deal with returns, price credits, manual invoices, stocktake price changes, qty variances between reception and invoice etc.  You've also got many different type of discount and rebate.  Some based on volume, some on price.

But our basic approach was to create a new pricelist type called rebate.
Look it up at reception to get received values right.
Look it up at invoice to get journal entries right
Store a rebate pricelist against vendor
Store a rebate accrual account in product category or product (Current Asset).

So in your simple example.
Purchase Order $10.00, Supplier Invoice $8.00

Receive goods DR Stock $8.00 CR Stock Input $8.00
Receive Supplier Invoice DR Stock Input $8.00 CR Creditors $8.00

But if the discount came as a separate credit
DR Stock Input $8.00
DR Rebates Due $2.00
CR Creditors $10.00

then
DR Creditors $2.00
CR Rebates Due $2.00

Our initial design was to accrue rebates at goods reception, but it just all got too hard, and made more sense to accrue at supplier invoice.




On Fri, Oct 14, 2016 at 9:02 AM, John Pia Jr <jpiajr@southmill.com> wrote:
Hello All,

How does Odoo handle finanacial accounting for discount on vendors invoices. right now we have a discount account where we make an entry to for all discounts. Is this something Odoo handles out of the box?

Thanks

--
John Pia Jr
South Mill Mushroom Sales Inc. | Kaolin Mushroom Farms Inc.
Office: (610) 444-4800 [x242] | Mobile: (610) 470-5163 | South Mill Online!

  
   

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