We understand that there may be some confusion about the need to make theclosing entries at the end of each accounting period. However, according to the regulations accounting and recommended practices, it is not mandatory to make closing entries manually in the traditional sense when presenting the books to the Commercial Registry. This is something that Odoo also follows in its accounting system but it is not the only software, as large ERPs also resolve it in the same way.
Next, we explain how the year-end process works with Odoo, how the income statement account 129 from the previous period is distributed, and the most common questions.
We will also share how to correctly create an opening entry in Odoo considering the balances from previous periods and the pending balances.
Context and Purpose
- The opening entry is essential at the beginning of a new accounting period to transfer the final balances from the previous period to the new period.
- It ensures that the initial balance of the new period accurately reflects the continuity of the accounts.
Preparation of Previous Data
- The final balances of the accounts from the previous period (assets, liabilities, equity, etc.) are collected.
- Pending invoice balances or unresolved transactions are also included.
Step-by-step process in Odoo
- Reconcile the reconcilable accounts dated prior to the official opening in Odoo.
- Print a balance of the current balances with company details and without.
- Make a reversing entry of those accounting balances leaving the accounting at €0.
- Enter the official initial balances from the previous program in Odoo into our Odoo accounting/accounting entries section, always dated one day before, that is, if we want an opening on 01/01/2026, we will set the entry to date 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.
Common errors and recommendations
- Omission of any account with a pending balance that generates imbalances.
- Never use sub-accounts for customers, suppliers, and creditors.
- Errors in assigning negative or positive balances incorrectly.
- Verify that all closed accounts are included or correctly adjusted.
Practical importance
- Ensures accounting continuity with consistency.
- Helps avoid errors in balances for the new fiscal year.
- Facilitates subsequent auditing or accounting review.
We show you an example of how to make the best opening entry in your Odoo, only when you start accounting in Odoo:
Frequently asked questions regarding the need for accounting closure
This is a practice that was used when the processing capacity of the accounting programs it was more limited. The fact of "closing" accounting allowed for easier calculations since to generate a report they did not have to calculate from the beginning of the accounting but from the start of the fiscal year. Nowadays, there is no such restriction, so programs can generate reports calculating all accounting entries without problems.
Odoo,being specialized accounting management software, automates much of the process. When account 129 (results of the period) is used to calculate and transfer the final result of the period, it is not necessary to make a separate closing entry, as the system automatically makes this adjustment and correctly reflects it in the financial statements.
That is, with the closing entries of a period, traditional accounting programs calculate a Profit and Loss statement where they add revenues and subtract expenses. That entry closes those accounts and provides a result that applies to account 129.
With that result, it makes a closing entry and an opening entry that is actually the same entry but reversed. These two entries do not add value to the accounting.
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 compliance with regulations.
For proper operation, it is recommended to use the OCA Mis Builder modules or the balances with the standard Odoo reports; sometimes the use of both generates discrepancies depending on how the accounting result is distributed, as explained in the previous video.
Contaldia has more than 500 clients working this way without us having any problems beyond occasional inquiries from advisors and auditors.