USE CASE

Odoo allows us, through the "Expenses" application, to record travel expenses or costs incurred by employees, whether the employee covers the expense and we reimburse them or the expense is covered directly with a company card.

However, we have a small problem since the expense or accounts payable sometimes remains in the employee's name, and we also want to recognize the expense with the supplier without duplicating costs and, in the same way, be able to comply with the law. In Mexico, we have a tax obligation with the DIOT (Informative Declaration of Operations with Third Parties) tax report, which helps us report on the payment, withholding, crediting, and transfer of VAT in operations carried out with our suppliers.

Therefore, in this Forum Post, we will learn how to create a workaround to meet our tax obligations and have an accurate account payable report.

Necessary configurations

• Necessary applications
• • Install the following modules:

Now, let's enter accounting and create a Clearing Account that we will use to reconcile the movements.

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(DISCLAIMER: This account is for testing, please consult with your accounting team about the account to create)

We enter accounting:

• Settings
• • Chart of accounts
  • New

We set up the following Clearing Account:

NOTE*: It is important that the accounts allow for reconciliation (Reconcile) in order to make an appropriate balance cross-check. (This account is for testing, please consult with your accounting team about the account to be created)

Work Flow: 

We create an employee expense:

• We create the expense and make the following configurations:
• • Expense name
  • Expense category
  • Total amount (it is important to include the amount with taxes)
  • Taxes: (Remove the tax label to avoid balances in the DIOT report)
  • Paid by. (Employee to be reimbursed)
  • Account. (Select our accounting account "Clearing Account")

PRO TIP

• Attach the necessary information in the chatter to create the supplier invoice (XML and/or PDF), so that the accounting team can generate the supplier invoice.

Subsequently, we create the expense report:

• Send it to the manager 
• • Approve the expense (or wait for management to approve it)
  • • Validate it 
    • • Record accounting entries.
• 
  

Accounting flow

• We enter accounting:
• • Suppliers Invoices:
  • • Create a new invoice with the XML shared with us for the expense
    • Assign a date. 
    • Confirm the invoice.

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DO NOT ASSIGN PAYMENT.

RECONCILIATION OF BALANCES

Once we have our expenses recorded, as well as our supplier invoices, we will perform the balance reconciliation between them.

• Within the accounting application: 
• • Enter the Accounting menu
  • Reconcile
  • • Group by accounts and contact.

• Select balances in the accounts we want to settle
• • Domestic suppliers vs. Clearing Account

• Once we have selected the accounts we want to reconcile, we proceed with the reconciliation:

And we obtain the following:

✅

Supplier Invoice Paid:

• Cash basis accounting entry

• • Tax adjustment accounting entry affecting the DIOT report.
  • Creditable VAT movements.

• Just like a seat of Various on the payment of the invoice with the "balance" of the Clearing Account:

We can also view the DIOT tax report, where only the supplier is affected and not the employee:

• And we can observe that the value of creditable VAT in the month-end closing report is equal to the total of the DIOT report:

EXCELLENT! But… What about my employee's expenses and their payment?

• We enter the supplier's menu in accounting:
• • Employee expenses
  • We select the expense to be paid.

• We click on pay
• We select bank and payment method

✅

And... done 🥳