What Does Storno Accounting Refer To?
Storno Accounting serves as a method for rectifying errors or reversing transactions within the accounting system. For instance, if there's an erroneous monetary transaction or a need to refund a purchase, Storno Accounting facilitates the resolution of such scenarios.
One notable aspect of Storno is its ability to prevent duplicate entries in accounting records. Accountants often use red ink to annotate these Storno entries, hence the term "Red Storno." When reviewing financial reports, items corrected with Storno are highlighted in red, facilitating easy identification. This approach ensures organization and transparency regarding the modifications made.
Storno accounting in Odoo entails reversing or canceling a previously recorded journal entry. Within the realm of accounting in Odoo, Storno functionality enables users to rectify errors or revert transactions that were erroneously posted.
Below is the typical process of Storno accounting in Odoo.
* Identification of Incorrect Entry: Users identify a journal entry that needs correction due to errors or omissions. This could include mistakes in amounts, accounts, or dates.
* Access the Journal Entry: In the Odoo accounting module, users can locate and access the specific journal entry that requires correction.
* Initiate the Storno Process: Odoo provides a Storno feature that allows users to initiate the reversal of a selected journal entry. This process generates a new entry that is essentially the opposite of the original entry, thereby correcting the error.
* Review the Reversed Entry: After initiating the Storno process, users can review the newly generated entry. This reversed entry should have inverted values compared to the original entry to rectify the mistake.
* Verification of Financial Impact: Odoo recalculates balances to ensure that the corrected entry aligns with the financial records. Users should verify the financial impact to confirm that the reversal has been accurately executed.
* Audit Trail: Odoo maintains a clear audit trail by linking the reversed entry to its original counterpart. This traceability is crucial for compliance, transparency, and internal control purposes.
* Reporting Accuracy: It's essential to check that financial reports, such as balance sheets and income statements, reflect the corrected information after the Storno process. Odoo's reporting capabilities assist in this verification.
Storno accounting in Odoo offers a structured approach to rectify errors and uphold precise financial records, enhancing the reliability and integrity of the accounting system. The Storno Accounting method is widely adopted for financial record management in numerous Eastern European countries, including China, the Czech Republic, Croatia, Poland, Romania, Russia, Serbia, Slovakia, and Ukraine.
Let's explore how Storno accounting is handled in Odoo 17 Accounting using an example.
Initially, it is crucial to enable the Storno Accounting feature within your database. To do so, access the Settings menu of the Accounting module and proceed to the Storno Accounting tab, as illustrated in the screenshot provided below.
Enabling this feature enables the use of Storno accounting in Odoo. This accounting method utilizes negative credit or debit amounts within your account to offset initial journal entries. Such an approach aids in rectifying errors within accounting records. For instance, if there's an erroneous entry with incorrect financial information, it can be canceled. Following cancellation, the correct details must be inputted to ensure accuracy. When utilizing Storno accounting in Odoo, the system duplicates the original entry. In the duplicated entry, the amount is depicted as negative, signifying it as a reversal.
Now, let's initiate by creating a sales order for a particular product in response to a customer's request to purchase 10 quantities. This can be done by generating a new sales order within the Sales module of Odoo.
Upon confirming the order, we proceed to generate an invoice for this order. It's important to note that the customer has already made the payment.
The ledger posting to the respective accounts can be viewed under the Journal Items tab, depicted below.
After finalizing the payment procedures, you can fulfill the delivery by validating the transfer.
Upon validation of the transfer, the status is updated to DONE, indicating that the product will be transitioned from stock to the customer. The delivery of the product may take several days to complete, depending on the customer's lead time.
If the customer finds that two units of the delivered products are malfunctioning, they can choose to return these defective products to the company. To record the return of the product, you can navigate to the Sales module, select the respective Sales Order, and click on the Return button, as illustrated below.
Clicking on this button will prompt a new pop-up window where you can specify the quantity that the customer wishes to return.
Now, proceed by clicking on the Validate button to confirm the return transfer.
Upon confirming the return, the company is required to refund the customer by issuing a credit note.
Click on the Credit Note button located on the customer invoice. This action will prompt a new pop-up window to appear, as depicted below.
Enter the reason for the credit note in the provided space. Then, proceed by clicking the Reverse button.
When reviewing the ledgers of the reversed invoice, you'll notice that the income account displays as -(Credit) rather than a debit, while all other accounts are shown as negative.
In Storno accounting, reverse entries are displayed in negative to facilitate easy identification, as illustrated in the image above.
Efficiently managing Storno accounting in Odoo 17 is essential for ensuring the accuracy of financial records. By adhering to these steps, businesses can streamline the reversal of journal entries, promptly rectify errors, and uphold the integrity of their financial data. Odoo's intuitive interface and extensive features make it a dependable option for businesses in need of efficient accounting solutions.