A business's money flows through its bank accounts, and journals are how the accounting organises the recording of transactions. This piece is about bank account and journal setup in Odoo.
Bank accounts in the accounting
A business has one or more bank accounts, the accounts through which its money genuinely flows, money received from customers, money paid to vendors, and the rest. For the accounting to reflect the business's money, those bank accounts have to be set up in Odoo. Setting up a bank account means configuring it in the system so the accounting knows about the business's genuine bank account and can reflect the money flowing through it.
What journals are
A journal, in accounting, is a way of organising the recording of transactions. Transactions of a particular kind are recorded in a particular journal. There are journals for sales, for purchases, for the bank, and others. The journal is an organisational structure in the accounting: it groups transactions of a kind, which keeps the accounting organised and supports how transactions are processed and reported. A bank account, in particular, has a journal associated with it, the bank journal, through which the transactions of that bank account are recorded.
Why this setup matters
Bank account and journal setup matters because it is part of the foundation of the accounting. The bank accounts being set up correctly is what lets the accounting reflect the business's genuine money and lets bank reconciliation, the matching of the accounting against the bank, work. The journals being set up correctly is what gives the accounting its organisation, so transactions are recorded and grouped properly. Together, bank accounts and journals are part of the structural foundation that the accounting is built on, alongside the chart of accounts.
Setting it up
Setting up bank accounts and journals means configuring the business's genuine bank accounts in Odoo, each with its journal, and ensuring the journals the business needs are set up. As with the chart of accounts and taxes, much of the journal structure comes appropriately from the country localization, and the bank-account-specific setup is configuring the business's genuine bank accounts. The setup should reflect the business's genuine banking, the accounts it genuinely has, and the genuine organisation of its accounting.
Set it up with accounting knowledge
An honest note. Bank account and journal setup is part of the accounting foundation, and like the chart of accounts and taxes, it is genuinely an accounting matter. Setting up journals correctly, in particular, involves accounting understanding of how transactions should be organised. A business should set up its bank accounts and journals with proper accounting knowledge, so this part of the accounting foundation is sound. It is, with the chart of accounts and tax setup, the foundational accounting configuration that the rest of the accounting depends on.
The takeaway
Bank account and journal setup in Odoo configures where the business's money flows and how transactions are organised in the accounting. Bank accounts being set up correctly lets the accounting reflect the business's genuine money and lets bank reconciliation work; journals organise the recording of transactions by kind. Together they are part of the accounting foundation, alongside the chart of accounts. Set them up to reflect the business's genuine banking, with proper accounting knowledge. For how we approach Odoo, see our ERP practice.