Monitoring your company’s cash flow is one of the most critical aspects of financial management. While invoices and bills record what is owed, your company’s bank account reflects what has actually been paid.
Bank synchronization bridges the gap between accounting records and real bank transactions. By connecting a bank account directly to Odoo, transactions are imported automatically, matched with invoices or bills, and accurate cash balances are maintained with minimal manual effort.
What is bank synchronization?
Bank synchronization is the process of connecting a bank account via an internal or external provider. This allows financial transactions to be fetched and recorded by said provider without direct communication with the bank.
Odoo supports international and local banks depending on your fiscal location and uses third-party providers when needed.
How to connect a bank account
Navigate to the Accounting app and find a card with the name “Bank”.
Automatic Setup
To connect a bank, search for your banking institution. Odoo may then direct you to a third party provider to link your company’s bank account. Submit the required information, such as the account number, and all your transactions will automatically be linked to Odoo.
Banking institutions may ask whether the account you will conect is for business, personal, or corporate use. To connect the account successfully, you are required to enter information such as the account number.
Manual Setup
If your banking institution is not supported, you can add them manually by entering their name on the search bar. Then, enter the account number and swift code.
Manually connecting a bank account requires you to input the account number, bank name, and its SWIFT code.
Bank statements and automatic matching
A transaction is recorded in a document called a bank statement. Bank synchronization automates the process of importing and record keeping of these documents. Odoo also reconciles them with customer invoices and vendor bills in your accounting.
If your banking institution is not supported, transactions must be manually entered or imported using formats such as CSV, XLSX, CAMT, OFX, and CODA. You can do so by navigating to the “Dashboard”, hover and select the three vertical dots, and select “Statements”.
Whether a bank is connected manually or automatically, the format for each bank statement is the same: the reference number, date, journal recorded, starting balance, and ending balance.
Managing cash accounts
Aside from bank accounts, Odoo also allows you to manage cash accounts used for daily business operations. A cash account represents physical money handled by your company, such as petty cash or cash registers used in retail transactions.
To create or configure a cash account:
Navigate to “Configuration”
Select “Journals”
Click “Create”
Choose the journal type as “Cash”
When creating a cash journal, a cash account is also created. A company may have multiple cash journals and accounts depending on their business needs.
You are required to provide the journal name, short code, and default accounts where transactions will be recorded. Similar to bank journals, cash journals track incoming and outgoing transactions and reflect them in your financial reports. Cash transactions can be recorded manually by creating payments and selecting the appropriate cash journal.
Since cash transactions are not automatically synchronized like bank accounts, they must be reviewed and reconciled regularly to ensure accuracy. Failure to record cash movements properly may result in discrepancies between your actual cash on hand and what is reflected in Odoo.
Wrapping Up
Bank synchronization and proper cash management strengthen your company’s financial control. By connecting your bank accounts to Odoo, transactions are automatically imported and matched with invoices or bills, significantly reducing manual encoding and potential human error.
Meanwhile, managing cash accounts ensures that physical money movements are properly recorded and reflected in your accounting records. Together, these processes provide a complete and accurate view of your company’s liquidity. To maximize these features, ensure that your bank accounts are properly configured, statements are reviewed regularly, and reconciliation is performed consistently.