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.. i18n: single: financial analysis
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single: financial analysis
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.. i18n: Company Financial Analysis
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.. i18n: ==========================
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Company Financial Analysis
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==========================
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.. i18n: You'll see here the analysis tools for your company's financial situation, in particular:
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You'll see here the analysis tools for your company's financial situation, in particular:
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.. i18n: * management indicators,
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.. i18n: * the accounting dashboard.
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* management indicators,
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* the accounting dashboard.
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.. i18n: .. index:: indicators
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.. i18n: Management Indicators
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.. i18n: ---------------------
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.. i18n: .. note:: Financial Indicators
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.. i18n: Indicators, sometimes called financial ratios, are tools for analyzing a company's finances.
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.. i18n: They enable you to compare two accounts or sets of accounts from the balance sheet or the profit
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.. i18n: and loss account, in the form of a ratio.
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.. i18n: They also let you measure the financial health of a company and make comparisons from one year to
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.. i18n: the next or against those of other companies.
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.. note:: Financial Indicators
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Indicators, sometimes called financial ratios, are tools for analyzing a company's finances.
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They enable you to compare two accounts or sets of accounts from the balance sheet or the profit
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and loss account, in the form of a ratio.
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They also let you measure the financial health of a company and make comparisons from one year to
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the next or against those of other companies.
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.. i18n: single: module; account_report
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single: module; account_report
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.. i18n: To define financial indicators in Open ERP you should install the module :mod:`account_report`.
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.. i18n: When installing the module the usual financial indicators are registered in Open ERP.
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To define financial indicators in Open ERP you should install the module :mod:`account_report`.
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When installing the module the usual financial indicators are registered in Open ERP.
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.. i18n: You can consult your indicators, calculated in real time, from the menu :menuselection:`Financial
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.. i18n: Management --> Reporting --> Custom Reports`.
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You can consult your indicators, calculated in real time, from the menu :menuselection:`Financial
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Management --> Reporting --> Custom Reports`.
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.. i18n: Indicators defined by default in Open ERP are the following:
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Indicators defined by default in Open ERP are the following:
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.. i18n: * :guilabel:`Indicators of Working Capital` : determines if the company can pay its short term debts in
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.. i18n: normal conditions. It's calculated from \ ``(Stocks + Cash + Current Assets) / Current
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.. i18n: Liabilities``\ .
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.. i18n: * :guilabel:`Financial Ratios` : enables you to calculate the company's liquidity. It is defined as follows:
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.. i18n: \ ``( Current Assets – Stocks) / Current Liabilities``\ .
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.. i18n: * :guilabel:`Fixed Assets` : in a going concern, the value of fixed assets are covered in the first place by
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.. i18n: owners' capital and in the second place by all of the long term liabilities. Ideally this indicator
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.. i18n: will be greater than 1.
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* :guilabel:`Indicators of Working Capital` : determines if the company can pay its short term debts in
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normal conditions. It's calculated from \ ``(Stocks + Cash + Current Assets) / Current
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* :guilabel:`Financial Ratios` : enables you to calculate the company's liquidity. It is defined as follows:
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\ ``( Current Assets – Stocks) / Current Liabilities``\ .
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* :guilabel:`Fixed Assets` : in a going concern, the value of fixed assets are covered in the first place by
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owners' capital and in the second place by all of the long term liabilities. Ideally this indicator
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will be greater than 1.
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.. i18n: .. tip:: Calculation of indicators
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.. i18n: Calculating indicators can take quite a while in Open ERP because you have to analyse the whole
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.. i18n: company's accounting entries.
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.. i18n: So it's best not to calculate all of the indicators at once, but just a small selection to keep
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.. i18n: calculation time within limits.
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.. tip:: Calculation of indicators
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Calculating indicators can take quite a while in Open ERP because you have to analyse the whole
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company's accounting entries.
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So it's best not to calculate all of the indicators at once, but just a small selection to keep
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calculation time within limits.
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.. i18n: Time analysis of indicators
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.. i18n: ^^^^^^^^^^^^^^^^^^^^^^^^^^^
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Time analysis of indicators
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^^^^^^^^^^^^^^^^^^^^^^^^^^^
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.. i18n: You can analyze the financial indicators along two axes. You must have a figure calculated at a
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.. i18n: particular instant of time when you compare accounts, balances and the ratios between them. But you
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.. i18n: can also calculate a time series to follow the change of a given indicator throughout the life of
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.. i18n: the company.
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You can analyze the financial indicators along two axes. You must have a figure calculated at a
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particular instant of time when you compare accounts, balances and the ratios between them. But you
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can also calculate a time series to follow the change of a given indicator throughout the life of
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.. i18n: single: module; account_report_history
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single: module; account_report_history
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.. i18n: To do a temporal analysis of your indicators, you must install the module
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.. i18n: :mod:`account_report_history` from the set of modules in addons-extra.
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To do a temporal analysis of your indicators, you must install the module
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:mod:`account_report_history` from the set of modules in addons-extra.
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.. i18n: Once this module is installed, you can click on a financial indicator to get a graph of its
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.. i18n: evolution in time.
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Once this module is installed, you can click on a financial indicator to get a graph of its
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.. i18n: .. figure:: images/account_report_history.png
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.. i18n: :align: center
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.. i18n: *History of an accounting indicator*
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.. figure:: images/account_report_history.png
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*History of an accounting indicator*
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.. i18n: Defining your own indicators
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.. i18n: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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Defining your own indicators
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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.. i18n: You can define your own indicators in Open ERP using the menu :menuselection:`Financial Management
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.. i18n: --> Configuration --> Custom Reporting --> New Reporting Item Formula`.
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You can define your own indicators in Open ERP using the menu :menuselection:`Financial Management
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--> Configuration --> Custom Reporting --> New Reporting Item Formula`.
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.. i18n: .. figure:: images/account_indicator_new.png
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.. i18n: :align: center
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.. i18n: *Defining a new indicator*
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.. figure:: images/account_indicator_new.png
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*Defining a new indicator*
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.. i18n: You should make sure that the accounts that you base indicators on are given unique account codes,
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.. i18n: because codes are used in the creation of formulae. Create a formula using the syntax indicated in
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.. i18n: the instructions at the bottom of the form:
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You should make sure that the accounts that you base indicators on are given unique account codes,
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because codes are used in the creation of formulae. Create a formula using the syntax indicated in
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the instructions at the bottom of the form:
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.. i18n: * Sum of debits in a general account: \ ``debit('12345')``\ ,
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.. i18n: * Sum of credits in a general account: \ ``credit('12345')``\ ,
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.. i18n: * Balance of a general account: \ ``balance('12345')``\ ,
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.. i18n: * Value of another indicator: \ ``report ('IND')``\ .
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* Sum of debits in a general account: \ ``debit('12345')``\ ,
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* Sum of credits in a general account: \ ``credit('12345')``\ ,
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* Balance of a general account: \ ``balance('12345')``\ ,
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* Value of another indicator: \ ``report ('IND')``\ .
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.. i18n: * \ ``12345``\ represents the code of a general account,
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.. i18n: * \ ``IND``\ represents the code of another indicator.
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* \ ``12345``\ represents the code of a general account,
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* \ ``IND``\ represents the code of another indicator.
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.. i18n: So, using this notation, the cash ratio is defined by \ ``balance('4', '5') / balance('1')``\ –
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.. i18n: that's the balance in accounts 4 and 5 divided by the balance in account 1.
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So, using this notation, the cash ratio is defined by \ ``balance('4', '5') / balance('1')``\ –
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that's the balance in accounts 4 and 5 divided by the balance in account 1.
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.. i18n: single: budgeting
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.. i18n: Good management budgeting
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.. i18n: -------------------------
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Good management budgeting
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-------------------------
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.. i18n: Open ERP manages its budgets using both General and Analytic Accounts. You'll see how to do this
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.. i18n: here for General Accounts and then in :ref:`ch-accts` for Analytical Accounts.
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.. i18n: Install :mod:`account_budget` to be able to do this.
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Open ERP manages its budgets using both General and Analytic Accounts. You'll see how to do this
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here for General Accounts and then in :ref:`ch-accts` for Analytical Accounts.
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Install :mod:`account_budget` to be able to do this.
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.. i18n: Use the menu :menuselection:`Financial Management --> Budgets --> Budget`
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.. i18n: to define a new budget.
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Use the menu :menuselection:`Financial Management --> Budgets --> Budget`
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to define a new budget.
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.. i18n: single: budget revisions
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single: budget revisions
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.. i18n: .. tip:: Budget Revisions
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.. i18n: Even though you *can* modify a budget at any time to make a revision of it, it's best if you don't do
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.. i18n: Rather than edit an existing budget document, make a new version so that you can keep your original
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.. i18n: estimates safe for comparison. This lets you analyze your changing perspectives of the
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.. i18n: company from revision to revision.
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.. tip:: Budget Revisions
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Even though you *can* modify a budget at any time to make a revision of it, it's best if you don't do
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Rather than edit an existing budget document, make a new version so that you can keep your original
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estimates safe for comparison. This lets you analyze your changing perspectives of the
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company from revision to revision.
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.. i18n: Begin data entry by entering a :guilabel:`Name`, a :guilabel:`Code`,
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.. i18n: and a :guilabel:`Start Date` and an :guilabel:`End Date` in your new budget.
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.. i18n: Then you can define the budgeted amounts within that period, one by one. For each, you define:
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Begin data entry by entering a :guilabel:`Name`, a :guilabel:`Code`,
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and a :guilabel:`Start Date` and an :guilabel:`End Date` in your new budget.
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Then you can define the budgeted amounts within that period, one by one. For each, you define:
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.. i18n: * an :guilabel:`Analytic Account`
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.. i18n: * a :guilabel:`Budgetary Position` : for example :guilabel:`Sales` or :guilabel:`Purchases`,
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.. i18n: * a :guilabel:`Start Date` and :guilabel:`End Date` for the use of the budget,
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.. i18n: * a :guilabel:`Planned Amount` in the default currency of the chart of accounts.
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* an :guilabel:`Analytic Account`
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* a :guilabel:`Budgetary Position` : for example :guilabel:`Sales` or :guilabel:`Purchases`,
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* a :guilabel:`Start Date` and :guilabel:`End Date` for the use of the budget,
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* a :guilabel:`Planned Amount` in the default currency of the chart of accounts.
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.. i18n: Once it's completed you can save your budget.
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Once it's completed you can save your budget.
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.. i18n: To print a budget and make calculations of expenditure to budget use the menu
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.. i18n: :menuselection:`Financial Management --> Budgets --> Budget` Open ERP then gives you a
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.. i18n: list of available budgets. Select one or more budgets and then click :guilabel:`Print Budgets` to create
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.. i18n: the report for each in a date range of your choosing.
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.. i18n: The figure :ref:`fig-accbudg` gives an example of a budget produced by Open ERP.
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To print a budget and make calculations of expenditure to budget use the menu
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:menuselection:`Financial Management --> Budgets --> Budget` Open ERP then gives you a
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list of available budgets. Select one or more budgets and then click :guilabel:`Print Budgets` to create
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the report for each in a date range of your choosing.
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The figure :ref:`fig-accbudg` gives an example of a budget produced by Open ERP.
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.. i18n: .. _fig-accbudg:
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.. i18n: .. figure:: images/account_budget.png
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.. i18n: :align: center
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.. i18n: *Printing a budget*
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.. figure:: images/account_budget.png
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.. i18n: You could also use the menu :menuselection:`Financial Management --> Reporting --> Budgets`
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.. i18n: which gives you a choice of one or more :guilabel:`Budgetary Position` entries before
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.. i18n: clicking :guilabel:`Budget` and choosing a date range. This gives a budgetary analysis report for each
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.. i18n: of the positions.
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You could also use the menu :menuselection:`Financial Management --> Reporting --> Budgets`
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which gives you a choice of one or more :guilabel:`Budgetary Position` entries before
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clicking :guilabel:`Budget` and choosing a date range. This gives a budgetary analysis report for each
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.. i18n: The Accounting Dashboard
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.. i18n: ------------------------
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The Accounting Dashboard
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------------------------
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.. i18n: .. figure:: images/account_board.png
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.. i18n: :align: center
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.. i18n: *Accounting Dashboard*
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.. figure:: images/account_board.png
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*Accounting Dashboard*
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.. i18n: single: module; board_account
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single: module; board_account
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.. i18n: If you've installed the module :mod:`board_account`, Open ERP gives you an accounting dashboard
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.. i18n: that can be presented to your accounting staff as they sign into the system (if you have set it as
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.. i18n: their Home Page). This dashboard provides an analysis of the company's financial health at a glance.
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If you've installed the module :mod:`board_account`, Open ERP gives you an accounting dashboard
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that can be presented to your accounting staff as they sign into the system (if you have set it as
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their Home Page). This dashboard provides an analysis of the company's financial health at a glance.
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.. i18n: This gives a description of the different parts of the dashboard, from top to bottom then from left
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This gives a description of the different parts of the dashboard, from top to bottom then from left
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.. i18n: * :guilabel:`Analytic accounts to close` : when you're managing cases each analytical account is a
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.. i18n: project or a contract. This area gives the accounts that must be closed (for example, contracts
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.. i18n: expired, support hours exceeded).
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.. i18n: * :guilabel:`Accounts to invoice` : shows analytical accounts where there are charges to be
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.. i18n: * :guilabel:`Draft invoices` : gives the list of invoices waiting to be approved by an accountant.
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.. i18n: * :guilabel:`Costs to invoice` : gives the weekly changes which can be, but haven't yet been,
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.. i18n: * :guilabel:`Aged receivables` : gives a weekly graph of the receivables that haven't yet been
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.. i18n: * :guilabel:`Aged income` : gives a weekly graph of the company's turnover.
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* :guilabel:`Analytic accounts to close` : when you're managing cases each analytical account is a
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project or a contract. This area gives the accounts that must be closed (for example, contracts
450
expired, support hours exceeded).
452
* :guilabel:`Accounts to invoice` : shows analytical accounts where there are charges to be
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* :guilabel:`Draft invoices` : gives the list of invoices waiting to be approved by an accountant.
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* :guilabel:`Costs to invoice` : gives the weekly changes which can be, but haven't yet been,
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* :guilabel:`Aged receivables` : gives a weekly graph of the receivables that haven't yet been
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* :guilabel:`Aged income` : gives a weekly graph of the company's turnover.
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.. i18n: In each panel of the accountants' dashboard you can click the :guilabel:`Zoom` button at the top
466
.. i18n: right to investigate the detail of your financial indicators.
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In each panel of the accountants' dashboard you can click the :guilabel:`Zoom` button at the top
470
right to investigate the detail of your financial indicators.
472
.. i18n: The Accounting dashboard is dynamically integrated, which means that you can navigate easily through
473
.. i18n: the data if you want more detail about certain factors, and edit the entries if necessary.
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The Accounting dashboard is dynamically integrated, which means that you can navigate easily through
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the data if you want more detail about certain factors, and edit the entries if necessary.
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.. i18n: .. Copyright © Open Object Press. All rights reserved.
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.. Copyright © Open Object Press. All rights reserved.
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.. i18n: .. You may take electronic copy of this publication and distribute it if you don't
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.. i18n: .. change the content. You can also print a copy to be read by yourself only.
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.. You may take electronic copy of this publication and distribute it if you don't
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.. change the content. You can also print a copy to be read by yourself only.
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.. i18n: .. distribute paper or electronic based versions of this book (translated or not)
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.. i18n: .. in bookstores. This helps to distribute and promote the OpenERP product. It
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.. i18n: .. also helps us to create incentives to pay contributors and authors using author
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.. i18n: .. rights of these sales.
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.. We have contracts with different publishers in different countries to sell and
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.. distribute paper or electronic based versions of this book (translated or not)
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.. in bookstores. This helps to distribute and promote the OpenERP product. It
501
.. also helps us to create incentives to pay contributors and authors using author
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.. rights of these sales.
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.. i18n: .. Due to this, grants to translate, modify or sell this book are strictly
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.. i18n: .. forbidden, unless Tiny SPRL (representing Open Object Press) gives you a
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.. i18n: .. written authorisation for this.
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.. written authorisation for this.
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.. i18n: .. Many of the designations used by manufacturers and suppliers to distinguish their
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.. i18n: .. products are claimed as trademarks. Where those designations appear in this book,
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.. i18n: .. and Open Object Press was aware of a trademark claim, the designations have been
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.. i18n: .. printed in initial capitals.
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.. Many of the designations used by manufacturers and suppliers to distinguish their
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.. products are claimed as trademarks. Where those designations appear in this book,
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.. and Open Object Press was aware of a trademark claim, the designations have been
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.. printed in initial capitals.
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.. i18n: .. While every precaution has been taken in the preparation of this book, the publisher
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.. i18n: .. and the authors assume no responsibility for errors or omissions, or for damages
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.. i18n: .. resulting from the use of the information contained herein.
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.. While every precaution has been taken in the preparation of this book, the publisher
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.. and the authors assume no responsibility for errors or omissions, or for damages
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.. resulting from the use of the information contained herein.
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.. i18n: .. Published by Open Object Press, Grand Rosière, Belgium
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.. Published by Open Object Press, Grand Rosière, Belgium
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