Odoo Accounting Software – Everything you need to Know

Odoo Accounting is the accounting app in Odoo. Odoo is a business software made of separate apps, like sales, stock, purchase and accounts. You open it in a browser and pick only the apps you need.

Businesses use it to send invoices, enter supplier bills, match bank payments and file tax figures. It also gives reports like the balance sheet and profit and loss, and it handles budgets and more than one currency. Small and mid-size firms use it the most.

The main difference from a tool like Tally Prime is the link to other work. When a sale is made in Odoo, the invoice and the accounting entry follow from it. No one types the sale twice.

Key Takeaways

• Odoo is a set of apps. Accounting is just one of them.
• A sale, a purchase and a stock move can all flow into the books on their own.
• The free Community edition covers basic needs. Many advanced accounting features need Enterprise.
• The final cost depends on users, apps, hosting and setup.
• Setup is where most of the work is, so choose your partner with care.

Become an Accounting Pro – Learn from Industry Experts!

Introduction: Understanding Odoo Accounting

Most small businesses start with simple accounting software. It works well for a while. Then the business grows. Stock needs tracking. Sales need to link with invoices. A second shop opens. The accounts team starts copying numbers between tools, and mistakes creep in.

That is the point where many owners start looking at ERP software. ERP means one system for many parts of a business. Odoo is one of the better-known options. It is popular with small and mid-size firms because you can start small and add more later.

This blog explains Odoo Accounting in plain words. You will see what it does, how it works, who should use it and what decides the cost.

What Is Odoo Accounting Software?

Odoo is a business software suite. It was earlier called OpenERP, and it is made by a company based in Belgium. It has many apps, such as:

• Accounting
• Sales
• CRM
• Inventory
• Purchase
• Manufacturing
• Website and e-commerce
• Point of sale
• HR and projects

Each app does one job. All apps share the same data.

The accounting app

Odoo Accounting handles the money side. You use it to send invoices, enter supplier bills, record payments and match bank entries. It also gives you reports.

Two editions

Odoo comes in two main editions.

• Community: free and open source. It has basic features, including simple invoicing.
• Enterprise: paid. It has more features and support, such as bank syncing, asset tracking and advanced reports.

What each edition includes changes with new versions. So check Odoo’s site for the latest details before you decide.

Where you can run it

• Odoo Online: hosted by Odoo, so you just log in
• Odoo.sh: a hosting platform for companies that need custom code
• On-premise: installed on your own servers

A simple example

A small furniture business sells tables to shops. An order comes in. The sales team makes a quote in Odoo. The stock team checks if wood is available. When the tables ship, the invoice is made from the same order. The accounting entry is created without anyone typing it again.

Key Features of Odoo Accounting

Here are the main features that accountants use every day.

1. Invoicing

You can create invoices from sales orders or from scratch.

• Send invoices by email
• Set payment terms
• Track which invoices are paid

2. Vendor bills

This handles money you owe to suppliers.

• Enter bills by hand or from emails
• Set due dates
• Approve and pay bills

3. Bank reconciliation

This matches your bank statement with your books.

• Import bank statements
• Get match suggestions
• Reconcile payments with invoices and bills

In the Enterprise edition, you can also sync with some banks. Support depends on the country.

4. Payments and follow-ups

Odoo tracks who has paid and who has not.

• Record customer and supplier payments
• Send reminders for late payments
• See aged receivables and payables

5. Taxes

You can set up taxes for your country. This covers sales tax, purchase tax and tax reports. In India, check that the setup covers GST rules and returns before you start.

6. Multi-currency

If you deal with foreign customers or suppliers, Odoo can handle more than one currency. It can also record exchange rate differences.

7. Analytic accounting and budgets

This is for tracking cost by project, department or product.

• Tag each entry to a project or team
• Set budgets
• Compare plan with actual

8. Fixed assets

You can record machines, vehicles and furniture, and Odoo works out depreciation. This feature comes with the Enterprise edition.

9. Financial reports

You can pull reports at any time.

• Balance sheet
• Profit and loss
• Cash flow
• Aged receivables and payables
• Tax report

10. Audit and access control

Roles decide who can see and change what. Changes are logged, which helps during audits.

How Does Odoo Accounting Work?

Odoo uses double-entry accounting, like any proper accounting system. Every entry has a debit and a credit.

Step 1: Set up the basics

First, you set up the company. This includes the chart of accounts, taxes, currency and bank accounts. Odoo has ready-made charts for many countries. You can change them.

Step 2: Work in journals

Entries are grouped into journals.

• Sales journal for customer invoices
• Purchase journal for supplier bills
• Bank journal for bank movements
• Cash journal for cash entries
• Miscellaneous journal for other entries

Step 3: Enter or import transactions

Most entries are not typed by hand. They come from other apps.

• A sales order becomes an invoice
• A purchase order becomes a vendor bill
• A stock move updates inventory value

You can also enter entries by hand when needed.

Step 4: Reconcile the bank

Import the bank statement. Odoo suggests matches between bank lines and open invoices. You confirm them. Anything left over needs a closer look.

Step 5: Close the period

At month end, check the reports. Make adjustments like depreciation and accruals. You can also lock a period so no one changes old entries.

Step 6: Read the reports

Open the balance sheet, profit and loss and other reports. You can drill down from a total to the entries behind it.

A quick example

A retailer sells goods for ₹50,000 on credit.

• The sales app makes the order.
• The invoice is created. It records ₹50,000 as money to be received, and the same amount as sales.
• Stock goes down.
• When the customer pays, the bank line is matched with the invoice.
• The receivable is cleared.

Nobody had to enter the same sale four times.

Odoo Accounting Modules and Integrations

Accounting works best when it is linked with other apps. Here are the common ones.

Sales and CRM

Quotes become orders, and orders become invoices.

• Customer details stay in one place
• Sales reports match the accounts

Purchase

Purchase orders turn into vendor bills.

• Match bills with orders and receipts
• Track what you owe

Inventory

Stock moves update the books.

• Stock value is tracked
• Cost of goods sold is recorded
• Fewer mismatches between stock and accounts

Manufacturing

If you make products, costs flow into the accounts.

• Raw material cost
• Labour and other costs
• Finished goods value

Point of sale

Shop sales from the counter go into the accounts at the end of each session.

Website and e-commerce

Online orders create invoices and payments without extra work.

Expenses and projects

Staff can submit expense claims. Project costs can be tracked by job.

Payroll

Payroll apps vary by country. Check if your country’s payroll rules are covered.

Payment providers and banks

Odoo can link with some online payment providers. Bank syncing depends on your country and bank.

Third-party apps

Odoo has an app store where other developers sell add-ons. Quality varies, so test before you rely on one.

Odoo Accounting for Different Types of Businesses

Odoo is flexible, so it fits many kinds of businesses.

Small shops and traders

They need invoicing, stock and simple reports. Odoo covers this and lets them add more apps later.

Service companies

Agencies and consultants bill by project or hours. Odoo can link timesheets to invoices.

Retail and e-commerce

Shops and online stores need stock, sales and accounts to match. Odoo links them.

Manufacturers

They need to track raw material, production and costs. Odoo’s manufacturing app feeds the accounts.

Distributors and wholesalers

They deal with many suppliers, customers and stock locations. Odoo helps keep it organised.

Startups

Startups can begin with only accounting or invoicing. As they grow, they add sales, CRM or stock.

Non-profits and trusts

They can use analytic accounts to track funds by project. Check local rules for reporting.

Multi-company groups

Odoo supports more than one company in the same system. Check how it fits your reporting needs.

Odoo Accounting vs Traditional Accounting Software

Traditional accounting software, like Tally Prime, Zoho Books or QuickBooks, focuses on bookkeeping. Odoo is a wider system.

Where Odoo is stronger

• One system for accounts, sales and stock
• Add apps as you grow
• Can be adjusted to your process
• Free Community option for basic needs

Where traditional tools are stronger

• Faster to start
• Easier for plain bookkeeping
• Often lower cost
• Well known to accountants in India, especially Tally

Benefits of Using Odoo Accounting

1. One system for many jobs

Accounts, sales, stock and purchase share one set of data.

• Less copying between tools
• Fewer mismatches
• Easier to see the full picture

2. Start small, grow later

You can start with one app and add more.

• Pay only for what you use
• No need to switch systems
• Add users when the team grows

3. Less manual work

Entries often come from other apps.

• Invoices from sales orders
• Bills from purchase orders
• Bank matching suggestions

4. Flexible

Odoo can be adjusted to your process.

• Custom fields and reports
• Add-on apps
• Settings for different taxes and currencies

5. Live reports

You can see the numbers any day.

• Balance sheet and profit and loss
• Aged receivables
• Drill down to the entry

6. Open source option

The Community edition is free to use. Businesses with technical help can adapt it.

Also Read: NetSuite Accounting Software

Limitations and Considerations Before Choosing Odoo Accounting

Odoo is good, but not perfect. Think about these points first.

1. Edition differences

Many advanced accounting features are in the Enterprise edition. If you plan to use only the free version, check what is included.

2. Setup needs skill

It is not a plug-and-play tool for a full setup. Someone needs to set up taxes, charts, journals and roles.

• Hire a partner or learn the system well
• Test before going live
• Train your team

3. Quality depends on the partner

Odoo is sold and set up through many partners. Their skills vary. Ask for references and past work.

4. Customization can cause trouble

Heavy custom code can make upgrades harder. Keep changes to what you really need.

5. Local rules

Tax and legal rules differ by country. Check that Odoo covers what you need, like GST in India, before you start.

6. Add-ons vary

Third-party apps from the app store can be good or poor. Read reviews and test them.

7. Learning time

Accountants used to Tally or Excel need time to get used to a new system.

Questions to ask before you start

• Which edition do I need?
• Does it support my tax rules?
• Who will set it up and support it?
• What will it cost in total?
• Can I move my old data in?

Who Should Use Odoo Accounting?

It may suit you if:

• You are a small or mid-size business that is growing
• You want accounts linked with sales and stock
• You like the idea of starting small and adding later
• You have a partner or in-house help for setup
• You want a system you can adjust

It may not suit you if:

• You only need basic bookkeeping
• You have no one to set it up
• Your business has very special compliance needs that Odoo does not cover well
• You want a system that works fully out of the box in one day

People who use it in a company

• Accountants and finance managers
• Business owners
• Sales and purchase teams
• Warehouse staff
• Auditors, with limited access

Career angle

Odoo skills can be useful for accountants. Some roles ask for experience with ERP tools like Odoo. If you know accounting and one ERP, you can apply for roles like Odoo functional consultant or ERP accountant.

Odoo Accounting Pricing: What Determines the Cost?

Odoo’s price is not one fixed number. It depends on how you use it. Prices and plans change, so check Odoo’s site for the latest details.

1. Edition

Community is free. Enterprise is paid and charged per user. Enterprise has more features and support.

2. Number of users

Enterprise is mostly priced per user. More users mean a higher bill.

3. Number of apps

Each app you add may change the cost. Odoo has also offered a free plan limited to one app. Check what is on offer now.

4. Hosting

You can choose between Odoo Online, Odoo.sh or your own servers.

• Online is simple, but has limits on custom code
• Odoo.sh is for companies that need custom code
• On-premise needs your own servers and IT support

5. Setup and implementation

A partner may charge for setup.

• Chart of accounts and tax setup
• Moving old data in
• Testing and training

For many firms, this is a big part of the total cost.

6. Customization

Custom reports, fields and workflows cost extra. More custom work means a higher cost.

7. Add-on apps

Some apps from the app store are paid.

8. Support and training

Ongoing support from a partner is often a separate cost. So is staff training.

Tips to keep costs in check

• Start with the apps you really need
• Ask for a clear quote with setup and support included
• Keep custom changes small
• Compare the total cost over a few years, not just month one

Become an Accounting Pro – Learn from Industry Experts!

Conclusion

Odoo Accounting is not the right pick for everyone. If your books are simple and you just need invoices and tax reports, Tally Prime or Zoho Books may get you there faster.

But if sales, stock and accounts keep falling out of step, Odoo is worth a look. You can start with one or two apps and add more as you need them.

Before you commit, ask for a demo with your own data. Find out exactly what the edition you want includes. And pick a setup partner with real examples to show you. That choice can matter more than the software itself.