I want to make sure I have a proper understanding for developing the Balance Sheet in Compiere. The part I am having a hard time figuring out is how to show the earnings on the balance sheet.
This is my understanding of how to do it in Compiere:
1. In Compiere, if you just put down the typical Assets and Liabilities on a balance sheet, they would not balance because you would be missing the earnings.
2. Gardenworld lists an Earnings accont - 32900 - which refers to Retained Earnings. This is not automatically populated so you must make manual journal entries to it. Retained Earnings are typically shown at the end of the year for a prior year's earnings so it isn't useful for the monthly balance sheet that we need to show.
3. To show the earnings on your balance sheet, you need to create lines on your balance sheet for the P&L accounts that allow you to derive the earnings (revenue accounts minus expense accounts). In other words, your Balance Sheet only balances once you pull the earnings over from the P&L and these earnings are not automatically populated into a single account.
Have I got this right?
yes ... but each report line in the Fin Report can have multiple sources for the value that gets rolled up into the displayed value so you could have a line called Retained Earnings which picked up the value that had actually been transferred across to the retained earnings account plus evrything that was still in your P&L accounts and had not been transferred from P&L to Balance Sheet.
You may want to see the Bugs and RFE section as there has been a number of changes in Fin Reports lately. The bugs will make it clear which version is needed for particular functionality to be available.
I am having problem with producing balance sheet, and found this posting (almost a year ago). I have exact the same question as mvonbodun had, and i am wondering if we need to manally update the retained earning account in order to generate a balance sheet. from accounting's practise, income summary account will be updated with rev/exp/retained earnings accounts at year end, but not for every month. So when a balance sheet is needed, what i did here is just to calculate net income and add it in the balance sheet. is this the right way? as i have an income statement working, is there a way to get data directly from this report other than calculating net income again in the balance sheet?
question 2: there is a dialogue box asking to enter period but also provide choice to "update balance". what does that check box update?
thank you very much for all the help!
re Question 2: update balance
My understanding of this functionality is... when a document is processed, any financial postings required are not created immediately but rather the document/transaction is place in a queue to wait for the "Accounting Processor" which runs on the server under the application server.
So when you generate a report it is possible that transactions related to the period to which you are about to report are still in the queue waiting on the Accounting processor to process!
If you say yes to updating the balance well then transactions in the relevant period are processed by the accounting processor BEFORE the report is run.
The best companies in the world take 2 days to close and up to 2 days to report. Some are aiming at one day close - either way you should check your queue before reporting - usually close off posting to the period too. 'Normal' companies take 4 days to close others up to 10 days or more. If the accounting processor is getting overwhelmed - you will probably notice the rest of the system grinding to a halt too.
Realistically, as long as you have someone monitoring your system you are going to be alright.
A suggested improvement might be a report to show the status of the queue and perhaps to use a real queue instead of a processor polling and some processor priority of the service.
go back to first principles...
the trial balance adds to zero therefore at any time [equity accounts plus the P&L accounts] = [assets - liabilities].
So if get the value of the equity accounts then add the 'Total Value' of the P&L accounts you will get the equity value you need without entering any journals. You will probably need to add some lines/subtotals in order to arrive at the P&L total .. set all those intermediate lines to 'not printed'
question2 - sometimes the updating of the balances used in the reports seems to fall behind the posting.. the update button overcomes this.... slowly. If any knows a better (and technical) explanation then please share it.
Got it. Thank you very much adaxa! Great help from you, always.
Hi colin and Mike,
What does accounting processor mean? How does it work? I am not aware of any processor and I don't quite understand the concept of "queue"...due to the fact that I am quite new to the accounting module. In terms of closing the period, are you talking about the year end? My limited knowledge told me that at year end, companies are creating summary entries, putting total revenue/expense and retained earnings into a summary account, so that the balance sheet could be balanced. Am I right? Is compiere supposed to do this? Thanks to all of you folks.
The accounting processor is a server process that runs within JBoss that collects all unposted accoutning entries and then applies the rules from the accounting schema in posting them to the general ledger.
It runs every x (definable) minutes. The advantage of a queue (which is the same concept of when you line up at th post office) is that the accounting processor would monitor a queue which would either be empty or have some records in it. The processor would contstant process the queue whilst there was something in it. The reason for not having a queue in the design is historical.....
When I said closing a period - I meant blocking from posting to it - by closing the period to the posting of certain document types. Over the accounting close process - you would stop posting of certain documents such as sales invoices (they should be going in to the next period). This helps you to close off the various processes (reconcile your sale ledger etc) - eventually closing (or blocking) entries to all document types.
I think the closing you are talking about is the part of the accounting process where we reset the counter in the profit and loss.
In accounting terms - a profit & loss is merely an explanation of how resources of the business as described in the balance sheet have moved between two points in time. You will find most accoutants are much more interested in the balance sheet (where as markets tend to focus a little too much on earnings)
Within the yearly accounting process, we reset the profit and loss to zero by clearing all of the accoutns to retained earnings (all previous trading results).
There is no automatic closing (as far as I know - I haven't look at the latest head) - it is a manual entry at the end of the year ....
Thanks to all of you...now I am a little bit clearer, but still have some silly questions:
1. Accounting processor: Are we able to see it, run it, set its time interval of running?
2. Documents: when they are completed, the status is "complete, not-posted". Do I have to click "not-posted" button to post them everytime I complete a doc, or wait for the accounting processor to post them in batch? I just don't know when the processor is going to run (magically)!
3. Queue: Is there a way to see the queue contents (docs in the queue waiting for posting)?
4. Closing the period: So the right way to do it is to close the period in compiere at month end before new sales orders/purchase orders are created/completed, and open it at early next month so that all other docs (shipment/payment/allocation...) will be posted in one month. Is my understanding correct?
1. Window "Accounting processor" is used to maintain it. You can set frequency ant other parameters.
2. You can post documents manualy, but documents will be posted by accounting processor when it runs.
3. As far as i know NO. There is no real queue, account processor selects all unposted documents and tryies to post them one by one.
re: 3. queue
yeah sorry if my choice of words confused. There is strickly speaking no queue... just documents not processed.
re: 4. closing periods
In ALL previous systems I worked with there was always this rush to process documents BEFORE any period closing could be taken. This was because it was this period close process which would update the YTD totals (year to dat) and reset MTD (month to date) totals etc. So it was very important that all documents were processed before the close could be done (because once once it usually couldn't be undone!).
Compiere however does things differently; rather than maintain running totals it calculates them on the fly. So the close of period in compiere has a completely different purpose. The purpose is simply one of control. You close a period to stop someone posting to a period other than the current one .. be that a future one or a past one.
So if by chance you found a document that was, for some reason, not posted as it should have been in a previous period it is possible to simple re-open the period and make the postings and close it again. Like I say the open/close is purely there for control purposes. (not sure what an accountant or auditor would think of this though?? but it is possible).
One other point.. you mention the postings from Sales & Purchase Orders on completion. The financial postings for documents are made when a document is completed okay... but in the case of Sales & Purchase orders there actually no financial postings! When you think about it - no goods or money changes hands so at this stage there are actually no transactions.
Hope I didn't confuse you more
>>>> "3. Queue: Is there a way to see the queue contents (docs in the queue waiting for posting)?"
..type "unposted" in the yellow box at bottom of the menu.. it takes you to a Window which lists all unposted documents and lets you zoom to them to complete or check them. when things have not happened as expected this is the first place I look..
Thank you very much the compiere experts for the great help again.
1. The accounting processor window allows me to set the frequency its type, so that it will automatically post all the "complete" but "not-posted" documents? Does this mean that it is not necessary to manually post the documents/payment allocation/invoice matching?
2. In terms of closing the period, I am not sure when to do it. I am using mostly the POS orders for sales, which generate shipment/invoice automatically when the order is completed, and our payment could be made the same day. Therefore, in this case, we should not worry about too much about the period closing issue am I right? On the purchasing side, the order/invoice could be the same day, but receipt/payment could be another day (and it might be the second month or the month after), so in this case, what is a good timing to deal with the period closing issue?
3. Queue: thanks adaxa, I found this unposted document list. It includes all complete+unposted docs and also the draft docs (not completed). So when the accounting processor runs the next time, it automatically post the "complete+unposted" docs, but the draft ones are left there, am I correct? I did "reset accounting" workflow and found some documents are added in this unposted docs list. I am assuming they will go back when the processor runs next time.
By the way, the next run time was set to sep 27 1:50pm but why it still not start to run yet?
Hi again Q
1. Yes to part one.
As for the second part ... I think yes .. not sure what you mean precisely. All documents are processed by the "accounts processor" be they invoice, receipt or payment.
2. I'm not an accountant, but I wouldn't get too caught up on the when question. Most people close the period at the start on the next period. But as I said before, it's more a control exercise in Compiere. Typically most documents will have been posted. But there may be some that aren't posted because of problems of one sort or another... and these should be resolved before closing. But both periods can be open together [as far as I know] so new documents will be getting posted to the new period.
3. only completed documents will have postings. draft documents won't. Part of the completion process is to create these postings. So I don't think drafts will be in the list of of "Unposted Documents"?
Thanks again for answering my questions. Re accounting processor, I am still not able to have it run - I have changed the frequency to run every hour, but from the log, there is no new runs, and the next run is set to Sep 27 which is 2 days ago. The server has been running for 12 hours and no new runs are seen. Anything wrong with what I have done? thanks again...
it doesn't sound like the Accounting Processsor is running then ... try restarting the server to see if that fixes it.
And check the logs to make sure there are no errors starting the jboss server.
For testing purposes I have my server set to run every 10 minutes or sometimes even less.. .over the top perhaps but for testing purposes it make little difference.
Thanks for the advise. Now my accounting processor works excelent! Q
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