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 Post subject: Is OpenERP fit for basic accounting?
PostPosted: Sun Feb 12, 2012 5:55 pm 
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Joined: Sat Apr 23, 2011 9:21 pm
Posts: 61
Location: Bonaire (Dutch Caribbean)
Dear all,

This weekend when I tried to close the year 2011, to my horror I discovered that a negative balance on an expense account is subtracted from the Net Profit on the P/L sheet.

The bug is described here: https://bugs.launchpad.net/bugs/930739
As a result, not only the Net Profit in P/L was wrong, in the Balance Sheet, Assets and Liabilities did not balance either. (Go figure....)

Handling account signs correctly seems the first and most important property of an accounting program.

Fortunately I had relatively few accounts and few account entries in this company so I was able to see and track down the error.

However, IMHO such grave errors as ignoring the sign on an expense account and calculate the Net Profit wrong should not happen in an accounting program. And, if this extremely simple action cannot be performed correctly in OpenERP, what should I expect more. Especially when I cannot oversee entries and results so easily.

Am I insane to expect this, or what?

jlinkels


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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Fri Feb 17, 2012 4:56 am 
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Location: Grand-Rosiere, Belgium
What version are you testing? I tested on trunk, and it seems correct.

Here is the connection to the database I used to test: http://trunk_2587.runbot.openerp.com:95 ... lient/home (login: admin, passwd: admin)

What's the account type you set on your newly created account? What's the "P&L / BS Category" you set on this account type?


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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Fri Feb 17, 2012 9:04 am 
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Posts: 1085
Location: Auckland, NZ
the underlying accounting is ok, but honestly the default reports are still really badly written and give a lot of errors, especially in regards to accounts that have balances opposite of normal (Accumulated Depn for example on BS), but better than they used to be. provided you rewrite them you get better results. is not so bad, at least the data is ok, but no you could not use the default reports for a credible bs/p&l IMO.

I can only assume in continental accounting you are never allowed an account to be in negative balance.

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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Sat Feb 18, 2012 4:49 pm 
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Joined: Sat Apr 23, 2011 9:21 pm
Posts: 61
Location: Bonaire (Dutch Caribbean)
@Fabien:

I can't connect to the link you specified. Is it only valid for a certain period of time or so?

The account I created:
Internal type: regular
Account type: Expense

The Expense account type:
Type name: Expense
Code: expense
P&L / BS cat: Profit & Loss
Deferral method: none

As a matter of fact, in the demo database there are two account types Expense. Both of them have the same settings.

I have tried to find the PL code in trunk, but I have not been succesful yet. In 6.0.3, the code for generating this report was in /openerp-server/addons/account/report/account_profit_loss.py, but this file isn't present. I assumed that when I download a branch with bzr branch lp:openobject-addons I would get the entire source tree for add-ons.

I'll continue to work and report back.

jlinkels


Last edited by jlinkels on Sat Feb 18, 2012 11:13 pm, edited 1 time in total.

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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Sat Feb 18, 2012 5:13 pm 
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Joined: Sat Apr 23, 2011 9:21 pm
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Location: Bonaire (Dutch Caribbean)
gdaddy wrote:
the underlying accounting is ok, but honestly the default reports are still really badly written and give a lot of errors, especially in regards to accounts that have balances opposite of normal (Accumulated Depn for example on BS), but better than they used to be.

At least that is reassuring. I can tell you my heart sunk into my shoes when I had finished entering all the 2011 invoices for my company and noticed that the balance sheet was off-balance. By starting with a clean demo fortunately it turned out to be quite clear where the error is.

gdaddy wrote:
provided you rewrite them you get better results. is not so bad, at least the data is ok, but no you could not use the default reports for a credible bs/p&l IMO.

Well, this is exactly the point of this thread. I think in this world, everything is about money. You can run a factory, a non profit organization, any kind of organization, it is all about money, money and more money. If even the accounting is not sound, what is an ERP system worth? Managers do not give a darn about underlying data, but they want to see a P/L which is correct, and they want it 3 times a day. Maybe OpenERP would gain more credibility if the one most important module (accounting IMHO) would be correct and flawless, and then concentrate on the other 1200 modules.

I have seen various responses about this particular problem, and hopefully it is solved in the trunk version as Fabien says. However I can't imagine that such a thing is still in after 10 years of development, or this is a regression error.

Sure I can adapt the reports myself, and I might do just that. However, I have spent 10 times more time in bug tracking and learning how to circumvent bugs and unusual behavior than on actual accounting. And that just for accounting and warehouse modules. That is simply not good, no matter how much voluntary effort has been put in by hundreds of developers.

I was planning to become an OpenERP partner and market is this program, I have taken the Functional and Technical trainings last year. But I simply don't dare to install this system somewhere because of this kind of errors.

gdaddy wrote:
I can only assume in continental accounting you are never allowed an account to be in negative balance.

What is continental here? USA or Western Europe (Funny that even according to Wiki both continents are referred like that).

Whatever, as we are taught accounting in the Netherlands, it is allowed to have a negative balance, although most have to be corrected before presenting the final reports. On expense accounts like "Various profit & loss" and "Foreign Exchange Losses" it is very common to have a negative account.

I have checked this behavior in two other ERP/accounting programs: xTuple Postbooks and SQL Ledger. xTuple is fully USA focused, in SQL ledger I loaded the Dutch accounting schemes. Both programs showed the correct behavior in handling negative expenses.

jlinkels


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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Sat Feb 18, 2012 11:57 pm 
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Joined: Sat Apr 23, 2011 9:21 pm
Posts: 61
Location: Bonaire (Dutch Caribbean)
@Fabien:

OK, I have downloaded and installed the trunk version. The P/L report is totally revised, including account types, report types and sign preference.

That invalidates all previous comments about the reports in 6.0.3.

HOWEVER despite of the good effort to make reporting as versatile as possible, it is not correct yet. Both the logic and implementation is incorrect (bugs).

Let me concentrate on P/L accounts.

There are two types of P/L accounts: Expense and Income. In accounting as know in USA and Europe these are the rules:

An Income when received is posted Credit. When Incomes appear on the P/L a credit amount should be positive.
An Expense when spent is posted Debit. When Expenses appear on the P/L a debit amount should be positive.

So when an Income account has a balance of 1000CR, the balance is 1000 if the sign is not reversed. Since the P/L shows this income as -1000 for a non-reversed sign, the logic is not correct. Image

When I do reverse the sign on Income View, all children show a balance which is correct, but the Income total is still negative. That must be a bug as the balances simply do not add up correctly. Image

For the Expense account view in the attached examples, the Expenses are booked credit and as such it is correct that they show a negative value. I am not sure what happens if Expenses is booked debit, then the balance should be positive. Then it is a real expense.

jlinkels

PS: I wonder if there is any double entry accounting system which needs to have the signs of the balances reversible. Although the implemented solution is extremely versatile, it also implicates configuration hell.


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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Mon Feb 20, 2012 8:45 pm 
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Joined: Sat Apr 23, 2011 9:21 pm
Posts: 61
Location: Bonaire (Dutch Caribbean)
OK, I went back concentrating on the 6.0 version. I have my own company's accounting in 6.0 for 2011, and I need to have correct financial reports. I am not ready yet for migration to 6.1.

So in this bug report: https://bugs.launchpad.net/openobject-a ... bug/930739 I went a long way demonstrating where the problems occur.

IMHO it is not acceptable that Profit or Loss is completely off when one of the accounts has an unexpected sign. As of today, 6.0 IS the stable version. Therefor I created a patch a proposed to have it applied in 6.0.

Porting 6.0 to 6.1 is not possible as the code for 6.1 underwent significant rewriting. The patch can not be applied. Neither can the code for 6.1 be backported to 6.0.

jlinkels


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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Wed Feb 22, 2012 11:06 am 
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Joined: Wed Jan 27, 2010 6:21 pm
Posts: 1085
Location: Auckland, NZ
you could try the reports in my account_account_extension module. They completely refactored balance sheet and profit and loss reports. I don't maintain it anymore as I moved on to 6.1 and haven't needed to port yet, but they are there. Depends on aeroo but fixes many problems associated with the standard reports.

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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Wed Feb 22, 2012 11:31 am 
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Posts: 293
What I don't understand with a thread like this one is that there's not more reaction from community leaders. I mean the system is plain faulty/buggy on a major aspect !

jlinkels put lot of effort to explain and illustrate his point. Either he's wrong, in which case someone should say/explain so, either he's right and a major issue is at cause here, and this should be adressed as a priority bug (before messing around drawing new fancy logos for the web interface for example...).


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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Wed Feb 22, 2012 3:12 pm 
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Joined: Wed Mar 24, 2010 1:03 am
Posts: 183
@Angela, exactly my thoughts. Someone should clarify. Accounting reports are so essential to any ERP system.


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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Wed Feb 22, 2012 11:00 pm 
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Joined: Thu Mar 31, 2011 4:35 am
Posts: 170
also waiting for any reply....... :(

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Grahame Jordan
Glass Expansion


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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Thu Feb 23, 2012 11:14 pm 
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Joined: Mon Feb 13, 2012 8:29 pm
Posts: 6
Location: Chicago, IL
Me three :) Its a little worrysome.


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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Fri Feb 24, 2012 1:20 am 
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Joined: Wed Jan 25, 2012 11:24 pm
Posts: 22
I aslo had a simler problem in 6.1 rc1 dev . installing 6.1 stable now will let you konw how i get on.

I am no accountant but thought it strange, purchased Open Source Accounting with OpenERP van Vossel Els (Author), Pinckaers Fabien (Author) to try and understand the accounting in OpenERP lets hope the book helps and up2date when it arrives .


regards


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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Sat Feb 25, 2012 11:26 am 
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Joined: Wed Mar 24, 2010 1:03 am
Posts: 183
@makka Please let us know how it went.


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 Post subject: Re: Is OpenERP fit for basic accounting?
PostPosted: Mon Feb 27, 2012 5:25 am 
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Joined: Mon Jul 04, 2011 6:23 am
Posts: 616
Location: Auckland, New Zealand
have a look at account_fstr for a simple reporting option - reverses signage where required (eg sales as a positive) and is quick and easy to set up.

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Kevin
Solnet Solutions Limited
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