Skip to Content

Accounting Closing year with Odoo

We demonstrate how the accounting close process works in Odoo.

We understand there may be some confusion regarding the need to make closing entries at the end of each accounting period. However, according to accounting standards and best practices, it is not mandatory to manually make closing entries in the traditional sense when submitting the books to the registry. This is something that Odoo also follows in its​ accounting systemc But it's not the only software, since the major ERP systems also solve it in the same way. es el único software, dado que los grandes ERP también lo resuelven de la misma forma.

Below we explain how the year change works with Odoo, how the profit and loss account 129 of the previous year is distributed, and the most common questions.

We will also share how to correctly create an opening entry in Odoo, taking into account balances from previous years and outstanding balances.

  1. Context and purpose
    • The opening entry is essential at the beginning of a new accounting period to transfer the ending balances from the previous period to the new period.
    • It is ensured that the opening balance of the new period accurately reflects the continuity of the accounts.
  2. Preparation of preliminary data
    • The final balances of the accounts from the previous year are compiled (assets, liabilities, equity, etc.).
    • This also includes outstanding invoice balances or unclosed transactions.
  3. Step-by-step process in Odoo
    • Reconcile the reconcilable accounts from before the official opening in Odoo. 
    • Print a balance sheet of current balances with and without company details.
    • Make a reversing entry for these accounting balances, leaving the accounting at €0.
    • Enter the official opening balances from the previous Odoo program into our Odoo accounting/accounting entries section, always dated one day earlier, that is, if we want to open on 01/01/2026, we will put the entry dated 31/12/2025.
    • Another option is to make an entry for the differences between the official balance of the previous program vs the current balance of Odoo.
  5. Common mistakes and recommendations
    • Omission of an account with an outstanding balance that generates imbalances.
    • Never use sub-accounts for customers, suppliers, and creditors.
    • Failures to assign negative or positive balances incorrectly.
    • Verify that all closed accounts are included or correctly adjusted.
  6. Practical importance
    • Ensures consistent accounting continuity.
    • It helps to avoid errors in the balance sheets for the new fiscal year.
    • It facilitates subsequent auditing or accounting review.

Te mostramos un ejemplo de cómo realizar el mejor asiento de apertura en tu odoo, solo cuando inicias la contabilidad en Odoo:


Frequently asked questions regarding the need for accounting closing

This is a practice that was used when the processing capacity of the accounting programs It was more limited. The fact that accounting "closed" made calculations easier, since to generate a report they didn't have to calculate from the beginning of the accounting period but from the beginning of the fiscal year. Nowadays, that restriction doesn't exist, so programs can generate reports calculating all accounting entries without problems.

Odoo, being specialized accounting software, automates a large part of the process. When using account 129 (profit and loss for the year) to calculate and transfer the final result for the year, a separate closing entry is not necessary, as the system makes this adjustment automatically and reflects it correctly in the financial statements.

In other words, with the closing entries for a fiscal year, traditional accounting software calculates a Profit and Loss statement by adding income and subtracting expenses. This entry closes these accounts and provides a result that is applied to account 129. 

With that result, a closing entry and an opening entry are made, which is actually the same entry but reversed. These two entries do not add value to the accounting records. 

There is no risk in not performing the accounting close, as it is not necessary to make manual closing entries if you are using Odoo, since your system ensures that everything is correctly recorded and in accordance with regulations. 

For proper functioning, it is recommended to use the OCA Mis Builder modules or the balance sheets with the standard Odoo reports. Sometimes, using both generates discrepancies depending on how the accounting result is distributed, as explained in the previous video.

Contaldia has over 500 clients working this way without any problems beyond occasional inquiries from advisors and auditors.