Introduction In ERP5, our way to see transaction lines differs from the traditionnal accounting way. Indeed, to stay coherent with the rest of the program, we see transaction lines as a movement from a source to a destination. This tiny articile aims to provide some informations about this concept. Traditionnal acccounting First of all, let's remind us what characterizes tradionnal accounting so as to understand easily the differences from ERP5 way of thinking. Double parts ! Asset is "what we own" and liability is what "we owe". Expense is "what you pay" and income is "what you receive". Moreover, there exists a balance between asset / expense and liability / income situations. That means that to each asset / expense variation corresponds a liabiliaty / income variation. What is a debit ? What is a credit ? Every increase (or decrease) of an asset element's value results in a debit (or credit) transaction of the corresponding account. Every increase (or decrease) of an liability element's value results in a credit (or debit) transaction of the corresponding account. An increase (or decrease) of an expense account results in a debit (or credit). An increase (or decrease) of an income account results in a credit (or debit). In other words and in a more simplistic way, from an asset / expense point of view, debit means that you "receive" some quantity of goods ("more") and credit means that you "give" some quantity of goods ("less") . From a liability / income point of view, this is the absolute contrary, as you see on the following schema :

NB : This therefore implies that the sum of all debits equals the one of all the credits. Section and third-party account A section and a third-party account are associated with each transation line. The section is the part of our entreprise that is concerned by the transaction line while the third-party account is the other entreprise (either the vendor or the client). Example 1 : Company A buy to Company B Company A purchases computers for 10,000 euros to Company B. Then, the account purchases ("what you receive") must be debitted of 10,000 euros and the account payable ("what you give") must be credited of 10,000 euros. In both cases, the section is "company A 's direction of purchases" and the third-party account is "Company B".

Example 2 : Company B sells to Company A Company B sells computers for 10,000 euros to Company A. Then, the account sales must be credited of 10,000 euros and the account receivable must be debitted of 10,000 euros. In both cases, the section is " company B 's direction of sales" and the third-party account is "Company A".

Accounting in ERP5

In fact, we have here the same transaction line seen from two different sides : company A 's side and company B 's side. There is a kind of symetry between the two : o the account purchases id debitted while the account sales is credited o the account payable is credited while the account receivable is debitted o the third-party account of the first is equivalent to the section of the second, and vice versa It is totally normal because if I have an AP to someone, the latter has an AR to me. Thus, AP and AR are balanced, just as purchases and sales are. So, we can put them on a same line.

Therefore, in ERP5 way, there are two lines like in any traditionnal accouting transaction and only one column more. We can use a single "quantity" column instead of the two "debit" and "credit" columns. Indeed, we can consider a negative quantity mouvement from purchases account to sales account and a positive mouvement from AP to AR.

The main advantages of such a concept are the following : o we stay coherent with the rest of ERP5 o we make easier accounting of big entreprises (but accounting of small entreprises is not made harder by setting default values for some columns)