Bank Reconciliation in Odoo: Several Banks, Naira and Dollar Accounts

Five banks. Naira and dollar accounts in several of them. Hundreds of transfers, POS settlements and bank charges every week. For many Nigerian finance teams, bank reconciliation is the single biggest reason month-end takes so long.

The work itself is not complicated. Every line on the statement has to be matched to something in the books. The problem is volume, and the fact that so much of it is done by hand in spreadsheets, one line at a time, at the end of the month.

This article explains why reconciliation is harder in Nigeria than the textbooks suggest, and how Odoo takes most of the manual work out of it.

Why it's hard in Nigeria

Several banks per company. Most businesses bank with more than one bank, for collections, payroll, supplier payments and foreign currency. Each account has its own statement format and its own download routine.

Many small charges. Transfer fees, SMS alerts, stamp duty, account maintenance charges and VAT on charges appear as separate lines. A busy account can have dozens of them a month, each needing an entry.

Receipts without references. Customers pay by transfer or POS, often without an invoice number in the narration. Someone has to work out who paid and for what before the receipt can be matched.

Foreign currency accounts. Domiciliary accounts are held in dollars but reported in Naira. Exchange rates move between the invoice date and the payment date, and the differences have to be recorded correctly.

How Odoo handles it

Importing statements

Bank statements can be imported into Odoo from the files your internet banking already provides, such as CSV, Excel or OFX, depending on what your bank offers. Each bank account in Odoo has its own journal, so statements from different banks and currencies stay separate.

Reconciliation models for recurring charges

Reconciliation models are rules that tell Odoo how to handle lines that look the same every time. A rule can recognise a transfer fee, stamp duty or SMS charge from the narration or amount and post it straight to the right expense account. Set up rules for your most common charges, and most of the small lines on a statement are handled without anyone touching them.

Matching on amount, reference and partner

For receipts and payments, Odoo suggests matches against open invoices and bills using the amount, the reference in the narration and the customer or supplier. Where a customer's account name is recognised, the match is proposed straight away. The accountant reviews and confirms rather than searching for each one.

Partial payments and one payment for several invoices

Customers don't always pay invoice by invoice. A single transfer can be matched against several invoices, and a part-payment can be applied to an invoice and leave the balance open. Remaining differences, such as a small short-payment or a bank charge deducted by the customer's bank, can be written off to the right account in the same step.

Naira and dollar accounts

Dollar bank accounts are kept in dollars in Odoo, with each transaction converted to Naira at the rate on the day. When a dollar invoice is paid at a different rate, Odoo records the realised exchange gain or loss automatically on reconciliation. Open balances in foreign currency can be revalued at period-end, so the balance sheet reflects current rates.

A clear picture for auditors

Because every statement line is matched to an entry, Odoo can show the balance in the books, the balance on the statement and the items not yet reconciled between them. When auditors ask how the bank balance is supported, the answer is a report, not a folder of spreadsheets.

What depends on your bank

Some banks offer live feeds that send transactions straight into accounting software, but these are not available for every Nigerian bank, and what is available changes over time. Statement import works with every bank, and it is the route we set up by default. If your bank does offer a feed that works with Odoo, we can look at it with you, but your reconciliation process should not depend on one.

A practical routine

Software helps most when it's used regularly. The finance teams that get the most from Odoo tend to follow a simple routine:

1. Reconcile weekly, not monthly. A week's statement takes minutes. A month's statement, with questions nobody remembers the answers to, takes days.
2. Give each bank account an owner. One person is responsible for keeping each account reconciled, with someone named as cover.
3. Add rules for your ten most common charges. Look at last month's statements, find the charges that appear most often, and set up a reconciliation model for each one.
4. Ask customers to quote invoice numbers. Put the request on your invoices and in reminders. Every reference you receive saves a search later.

Weekly reconciliation is one of the biggest steps towards a faster close, which we cover in Why Month-End Close Takes Weeks. Getting tax right in the same ledger helps too, as we explain in VAT, WHT and FIRS E-invoicing in Odoo.

Talk to us

If reconciling your bank accounts still takes days every month, book a free consultation. We'll look at your banks, accounts and current process, and show you how much of it Odoo could take off your team's hands.