News & Events
Maintaining Accurate Costing using Odoo
February 9, 2022
An inventory valuation of a company which helps to know the monetary value for products in their inventory. To ensure financial records on inventory reports, calculation of them is very important. The inventory valuation method is defined inside the product category. Firstly we can look at the product category. The product category is assigned to products to identify what category the product belongs to. The product category can be created from the inventory -> Configuration -> Product categories We can see all the existing categories, and also we can create new categories by clicking the CREATE button in the form. The Product category form is shown in below. Category Name: Category Defines the name of the product category. Parent Category: In some cases, a category is the child of another category. So, in that case, we can mention the parent category of the created category on the required field. If the category is not a child category, It is unnecessary to fill up the field. Routes: Routes define the path on which the product moves to the destinations. Force Removal Strategy defines how the product should leave the inventory source location. It can be First Expiry First Out (FEFO) or Last In First Out (LIFO), or First In First Out (FIFO).
Costing Method: Which Defines how products are valued. There are 3 types of Costing methods in Odoo they are.
- Standard Price: The products are valued at the cost price that we are given. It doesn’t change until manually done by the user
- Average Cost (AVGCO): The product cost is valued at its average cost
- First In First Out (FIFO): The product cost is valued based on the cost of the first product in and out from the inventory.
- Manual: If we select manual inventory valuation, then accounting entries will not be recorded automatically once the product enters or leaves the inventory.
- Automated: If we select automated inventory valuation, then accounting entries will be recorded automatically once the product enters or leaves the inventory.