How to Manage Loans in the Accounting Module in Odoo 18 (Enterprise)

Managing employee loans or company loans is an important accounting activity for many organizations. Odoo 18 (Enterprise) provides a structured and automated way to record loans, track repayments, generate accounting entries and maintain transparency in financial statements. In this blog, we will walk through the complete process of how loans work inside the Accounting module in Odoo 18.

 What Is a Loan in Odoo Accounting?

A loan in Odoo is a financial transaction where the company either

• Gives money to an employee (Employee Loan), or

• Takes a loan from a bank or external institution (Company Loan).

Odoo allows proper creation, disbursement recording, monthly installment management and journal entry generation.

STEP 1. Create a Loan Record

Go to:Accounting module > Accounting → Loans

Click Create.

Fill in:

1.  Name (Loan Name)This is the title of the loan.
   * You must enter a unique or meaningful name (Example: “Employee Loan – Harini”, “Vehicle Loan”, etc.).
     * Required field.

2.  Amount Borrowed
     * The total loan amount taken.
     * Example: ₹50,000 / $1,000.

3.  Interest
     * The interest rate for the loan.
     * Usually expressed as a percentage (Example: 12%).
     * Used to compute EMI or repayment amount.

4.  Outstanding Balance
     * The remaining loan amount is still unpaid.
     * Automatically updated when repayments are recorded.

5.  Loan Date
     * The date on which the loan starts.
     * This is the start of the repayment period.

6.  Duration
     * The total loan period.
     * Usually measured in months.
     * Example: 12 months, 24 months.

7. 1. Asset Group
        * The asset category linked to the loan.
        * For example:
                * Employee Loans
                * Vehicle Loans
                * Asset Purchase Loans
                * Used for categorization and reporting.

Click Save.

STEP 2. Generate the Loan Schedule (EMI)

While creating a loan schedule, it is created manually. Even after adding a line, we can set the duration. By clicking the Compute button, the loan schedule will be created automatically.

  Odoo automatically calculates:
  * Principal amount per month
  * Interest
  * Payments
  * Outstanding balance
  * datesSTEP 3. Confirm the Loan

Click Confirm Loan.

When confirmed:
  * Odoo posts a journal entry for loan disbursement
  * Total loan amount is transferred to the employee/vendor account or loan liability account

Example Journal Entry (Loan Given to Employee):
  * Debit – Employee Loan Account
  * Credit – Cash/Bank Account

STEP 4. Track Loan Status

Odoo provides real-time insights:
  * Remaining balance
  * Paid installments
  * Upcoming EMIs
  * Total interest paid
  * Loan aging and overdue

A smart button shows all journal entries related to the loan.

STEP 5. Close the Loan

When all installments are paid:
  * The loan automatically moves to Completed

   * Loan account balance becomes zero

All repayments are fully recorded

 STEP 6. Loan Analysis

Go to Accounting → Reports, and under the Management section, click on Loan Analysis to open the Loan Analysis report.

The Loan Analysis Report provides a clear summary of all employee loans, their repayment status, and outstanding balances. It is mainly used by HR, Payroll, and finance teams to monitor loan performance and finances.

Benefits of Managing Loans in Odoo 18

  * Automated EMI schedule
  * Accurate interest calculation
  * One-click journal entry generation
  * Clear visibility of loan balances
  * Seamless integration with Payroll & Accounting
  * Reduces manual errors

Conclusion

Odoo 18 (Enterprise) makes loan management smooth, accurate, and fully automated. With loan creation, installment generation, journal entries, and repayment tracking all integrated into the Accounting module, businesses can efficiently manage both employee and organizational loans without relying on external tools.