2.1 Customer invoicing & payments

The Order-to-Cash Accounting Flow

In Odoo 19, the customer side of accounting follows the order-to-cash cycle: a customer invoice is created, posted, sent, and eventually paid. Understanding each state transition and the journal entry behind it is the single most heavily tested area of the functional exam, because Accounting carries roughly 18% of the questions — the largest single module weight.

Invoice states and payment status

A customer invoice moves through document states: Draft, Posted, and Cancelled. Only a draft invoice can be edited freely; once you click Confirm, the invoice is posted, it receives a sequential number from its sales journal (for example INV/2026/00042), and Odoo generates the underlying journal entry. Posting is what turns the invoice into a legal accounting document — you cannot simply delete a posted invoice, you must reverse it.

Separately from the document state, every posted invoice carries a Payment Status: Not Paid, In Payment, Paid, Partially Paid, or Reversed. The distinction between In Payment and Paid trips up many candidates. When you register a payment, the invoice becomes In Payment — the money is recorded against an outstanding account but has not yet been matched to a real bank line. After bank reconciliation confirms the cash actually arrived, the status changes to Paid.

Creating invoices: from a sales order vs. manually

Invoices can be generated two ways. From the Sales app, confirming a quotation creates a sales order, and the Create Invoice button drafts the invoice automatically. What gets invoiced depends on the product's invoicing policy:

• Ordered quantities — invoice the quantity ordered, regardless of delivery (typical for services).
• Delivered quantities — invoice only what has actually been delivered (typical for stockable goods).

Alternatively, you can create an invoice manually in the Accounting or Invoicing app with no source order — useful for ad-hoc charges. Either way, the accounting result once posted is identical.

Down payments and partial payments

The Create Invoice wizard on a sales order offers more than a single full invoice. You can choose a down payment — either a fixed amount or a percentage of the order total — to bill the customer in advance; Odoo posts a down-payment invoice now and automatically deducts it from the final invoice raised later. On the receiving side, if a customer pays only part of what they owe, the invoice's status becomes Partially Paid and the unpaid residual stays open on the aged receivable until it is settled. Each posted invoice also exposes a Payment smart button listing the journal items reconciled against it, so you can always trace exactly which receipts cleared which invoice — an audit trail the exam expects you to recognize.

Payment terms and due dates

Payment terms control the invoice due date and can split a balance across multiple installments. Examples include Immediate Payment, 15 Days, 30 Days, End of Following Month, and compound terms such as 30% now, balance in 30 days. Odoo also supports early payment discounts (cash discounts) configured on the payment term, rewarding customers who pay before a cutoff. The due date drives both the aged receivable report and the follow-up engine.

The journal entry an invoice creates

When a customer invoice is posted, Odoo records a balanced journal entry. For a 1,000 invoice with 20% tax:

The receivable is debited for the gross total the customer owes; income is credited for the net revenue; and the tax account is credited for VAT collected on behalf of the tax authority. This debit-receivable / credit-income-plus-tax pattern is a guaranteed exam item — memorize the direction.

Registering payments and outstanding accounts

Clicking Register Payment on a posted invoice records the receipt. Instead of debiting the bank directly, Odoo debits an Outstanding Receipts account and credits Accounts Receivable, clearing the customer's balance. The invoice becomes In Payment. Later, during bank reconciliation, matching the payment to the real bank statement line moves the amount from Outstanding Receipts to the actual Bank account, and the invoice flips to Paid. This two-step design keeps the ledger accurate even when the cash and the paperwork arrive on different days.

Credit notes and refunds

To reverse or reduce a posted invoice, issue a credit note (also called a refund). Odoo offers three reversal modes: full refund, partial refund, and full refund and new draft invoice (to correct and reissue). A credit note mirrors the original entry — debiting income and tax, crediting receivable — so the customer's balance is reduced.

Sending invoices and following up

Posted invoices are delivered with Send & Print, which can email a PDF, provide an online payment link, or post a physical letter. For overdue receivables, Odoo's Follow-up Reports automate collection. You configure follow-up levels — each with a delay (for example, 15 days overdue, 30 days, 60 days) and an action such as send an email, send a letter, or schedule a manual call. Odoo evaluates the oldest overdue invoice against these levels and proposes the appropriate reminder, letting an accountant chase unpaid balances systematically rather than one invoice at a time.