Anglo- Saxon Accounting

Anglo- Saxon Accounting

Anglo-saxon accounting and continental accounting are the two major types of accounting practices used widely across the world. The Anglo Saxon accounting method is preferred by small communities and it is available in the enterprise edition of  OTX . You can activate this feature from the Settings menu of the Accounting module after enabling the developer mode as shown in the image below.

Many countries use this accounting type for managing their accounting operations. In anglo- saxon accounting, the costs of sold products are reported only after they are sold/delivered to the respective customer. But, the costs of the products will be taken into account as soon as they are received in stock of the company in Continental accounting.

The expense account will not be affected even if you receive a product or create a bill in Anglo- Saxon accounting. It will be affected only after the product is invoiced to the final customer. Create a purchase order for a product (set the inventory valuation of the product as Automated to automatically record the accounting entries).

After creating the purchase order, you can receive the product and validate the transfer. Now, go back to the Accounting module and check the Journal Entries where you can find the journal items of the corresponding entry.

You can create a bill for the purchase and confirm it. As soon as you confirm the bill, the journal items of the vendor bill will appear as shown below.

The expense account is not affected here. When you check the Purchase Journal Entry, you can see the data related to it as shown below.

Let’s check how the expense account is affected in Anglo- Saxon accounting. You can create a sales order for a product and confirm it.

After confirming the sales order you can Validate the delivery. From the Accounting module, you can observe the corresponding sales journal entry.

Now, you can create an invoice for the sales order and confirm it. The corresponding journal items will be shown as depicted in the image below.

While checking the corresponding journal items, you can observe that along with the income account, the expense account is also affected.

After selling the product and generating invoice, the cost of product is recorded as expense in the Anglo- Saxon accounting.