The Right Way to Track Loans and Assets in Odoo

Practical Setup. Clean Reports. No Mess at Month-End.

Introduction

When companies buy equipment, vehicles, or other high-value assets, those purchases often come with a loan attached. You don’t just record an asset—you also owe something for it. That’s why, in real-world accounting, assets and loans are rarely separated. But in Odoo, it’s easy to treat them as two different processes: one through the Asset module, the other through journal entries. This article shows you how to manage both sides properly. You’ll learn how to configure assets, track depreciation, record loans, automate repayments, and keep everything aligned—from vendor bill to final report.

1. Why Loans and Assets Belong Together

Assets and loans are two sides of the same coin. One increases your company’s value, the other shows what you still owe. If you only track the asset, your liabilities are missing. If you only track the loan, your fixed assets are invisible. In Odoo, assets and loans live in different places, but they’re connected in real life. A bill creates an asset. A loan funds it. Depreciation and repayments run in parallel. That’s why they should always be set up together—with consistency in accounts, schedules, and reports.

2. Configure Your Asset Management in Odoo

Before tracking assets, a few things need to be in place in your Odoo Accounting setup: Asset Models Create Asset Models to define how depreciation will work for different assets, like vehicles, equipment, or machinery. These models set the depreciation method and duration, ensuring Odoo handles depreciation automatically based on the model you choose. You can find Asset Models under Accounting > Configuration > Asset Models.

Chart of Accounts To automate asset creation, you need to link your accounts to the correct asset models. Go to Accounting > Configuration > Chart of Accounts, then find the account you used as the Fixed Asset Account in your asset model and click "View". Inside the Setup, scroll to the Automation section. There, set the Asset Model that applies to this account. Check "Manage Items" if you want Odoo to create a separate asset for each unit on the bill — useful when tracking or depreciating items individually.

Once saved, every time you post a vendor bill using this account, Odoo will automatically create an asset and link it to the model you assigned. If you skip this step, you’ll need to create assets manually for every purchase that should be tracked.

3. Creating an Asset from a Vendor Bill

When creating a vendor bill, ensure that the bill lines are assigned to the correct Fixed Asset Account from your asset model. Once you validate the bill, a smart button for Assets will appear. Clicking this button will take you to the newly created asset, which will be linked to the correct asset model and ready for depreciation management.

Your asset will now also be found under Accounting > Assets. If automation isn’t set, you’ll need to create the asset manually.

4. Asset Depreciation

Once your asset has been created and is visible, managing its depreciation becomes a straightforward part of your daily workflow. When you click the Asset smart button, the system not only creates the asset record but also displays essential depreciation information. If you haven’t already, link an Asset Group to the asset so you can later associate the loan with it through the 'Related Assets' smart button.

Within the asset record, you’ll find the Depreciation Board tab (please note, this tab will only be visible after you confirm or compute the depreciation for the asset). This board gives you a clear picture of both upcoming and past depreciation entries, showing the schedule and amounts automatically calculated by Odoo based on your asset model’s depreciation method. With automation in place, journal entries for depreciation are generated at regular intervals, reducing manual data entry and potential errors.

If you need to adjust the depreciation, simply click on the Modify Depreciation button. A pop-up window will appear, offering several options for updating the asset’s depreciation. For instance, if you decide to dispose of the asset, you can set the action to "Dispose," specify the disposal date, and enter the account information for loss recognition. Alternatively, if the asset is to be sold, you can choose the "Sell" action and link it to the corresponding customer invoice, ensuring that the closing journal item is correctly recorded. There’s also a "Re-evaluate" option, which allows you to update the asset’s residual and salvage values; when this option is chosen, the system automatically recalculates the associated depreciation entries. Should you need to temporarily halt depreciation, selecting the "Pause" option will suspend all depreciation entries until you decide to resume.

5. Recording the Loan in Odoo

If your asset was financed through a loan, Odoo gives you the tools to record, track, and link everything properly for full financial visibility. To begin, go to Accounting > Loans and click **“New” **to create a new loan record. This will open the Loan Creation form, where you can fill out the basic information. Right at this stage, it’s important to assign the same Asset Group that was used on the asset you’re financing. By doing this, Odoo will automatically link the loan to the correct asset. Once the loan is saved, you’ll notice a “Related Assets” smart button appear—clicking it will show you the asset(s) associated with this loan. This makes it easy to manage and track how your loan ties directly to what it helped purchase.

Once the loan details are filled in, Odoo offers two ways to build the repayment schedule. If you already know the exact structure of your loan, you can manually enter each installment line by line using the Add a Line button. Alternatively, if you want Odoo to calculate it for you, click the Compute button. This will generate the full Amortization Schedule, showing principal and interest breakdowns for each payment date based on your configuration.

Next, head over to the** Loan Settings** tab. Here, you'll configure the financial accounts that will track the loan’s movements. Start by selecting the Journal where loan-related entries will be recorded. Then, define the Expense Account for any interest payments, along with the Long-Term Liability Account and Short-Term Liability Account—these will track how much of the loan is still owed, and when.

Once everything is set, click the Confirm button. This will lock the loan settings and change the loan’s status from Draft to Running, officially activating the loan in the system. You’ll now see scheduled journal entries based on your payment plan.

6. Loan Closure

Once all loan installments have been posted and fully paid, Odoo will automatically mark the loan as “Closed.” This means the loan is settled, locked from further changes, and no longer active in your accounting. If the loan doesn’t close automatically, check if:

• All amortization lines are posted
• There are no pending or draft entries

7. Reporting

After setting up your assets, managing depreciation, and recording loan repayments, you’ll want to keep an eye on how it all reflects in your financial reports. General Ledger If you want to dig deeper into the accounting entries, the General Ledger is your go-to. Just go to Accounting > Reporting > General Ledger and filter by the accounts used in your assets and loan configurations (like depreciation expense, asset accounts, interest expense, etc.).

Loan Analysis Report

With the loan module active, you’ll also see** Accounting > Reporting > Loan Analysis**. This built-in report gives you a breakdown of all your active loans, showing outstanding balances, interest paid, and overall repayment progress. Perfect for monthly reviews or financial audits.

Conclusion

Once your assets and loans are properly set up in Odoo, everything just flows. Depreciation happens automatically, repayments are tracked without hassle, and your reports actually make sense. No more double-checking spreadsheets or fixing broken entries at month-end. This setup doesn’t just save time—it gives you real clarity. You always know what you own, what you owe, and how things are progressing. It’s clean, accurate, and ready for audits, internal reviews, or just your own peace of mind. So don’t settle for half the picture. Link your loans to your assets, automate what you can, and let Odoo do the heavy lifting. Simple as that.

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