Landed Costs in Odoo: Everything You Need to Know

Once a product arrives at its buyers, its landed cost is the total price. This includes transportation fees, duties, handling fees, etc. To calculate the actual selling price of the product, these prices are added and divided. In the traditional way, the landed costs in Odoo18 is calculated by adding up all the expenses and dividing them equally among the products. The landed cost calculation method varies from company to company and from product to product.

What is the Landed Costs in Odoo18

As part of Odoo, Landed Costs are used to account for additional costs when calculating the value of a product. This includes shipment costs, insurance, customs duties, taxes, and other fees.

The Landed Costs feature must first be enabled before adding landed costs. In the Inventory app > Configuration > Settings, scroll down to Valuation. Select the Landed Costs option, click Save to save changes. As soon as the page refreshes, a new Default Journal field will appear below Landed Costs in the Valuation section.

You will see a list of accounting journals when you click the Default Journal drop-down menu. Select a journal to record all landed cost entries.

How to Create Landed Cost Product

A landed cost product can be created in Odoo for charges that are consistently added as landed costs. This allows the landed cost product to be quickly added to an invoice line, rather than being manually entered each time a vendor bill is created.

You can create a new product by going to Inventory app, Products, Products, and clicking New. In the Product Name field, name the landed-cost product. In the Product Type field, click the drop-down menu and select Service.

How to Create Purchase Order in Odoo18

In the Purchase app, click New to create a new request for quotation (RFQ). In the Vendor field, add the vendor you want to order products from. Under the Products tab, click Add a product to add products.

How to Create Vendor Bills

You can create a Vendor Bill for the PO by navigating to the Purchase app, then clicking Create Bill. This will open a Draft Vendor Bill. Click the Add a line button in the Invoice Lines tab, then select the landed cost product that was previously created. To manually save and update the draft bill, click on the icon.

In the Landed Costs column, the checkbox for the product ordered from the vendor is not checked, while the checkbox for the landed cost product is checked. This distinguishes the landed costs from all other costs shown on the bill.

Adding landed costs

After adding a landed cost to the vendor bill, click Create Landed Costs at the top of the bill.

This action automatically generates a landed cost record, with the pre-filled landed cost in the product line under the Additional Costs tab.

In the Landed Cost form, click the Transfers drop-down menu and select the transfer to which the landed cost is assigned

After selecting the picking from the Transfers drop-down menu, click Compute at the bottom of the form, below the Total: cost field.

Valuation Adjustments Tab

Next, go to the Valuation Adjustments tab to view the effect of the landed costs. The Original Value column shows the initial PO price, the Additional Landed Cost column displays the landed cost, and the New Value column shows the total cost of the PO, which is the sum of both values.

When you’re ready, click Validate to post the landed cost entry to the accounting journal.

This will trigger the appearance of a Valuation smart button at the top of the form. Click on this button to open the Stock Valuation page, where you can see the product’s updated valuation.

Correct calculation of landed costs in Odoo18 makes better overall management of expenses possible, correct profit analysis, and efficient work. Following the process described above, your businesses can easily allocate additional expenses related to the product and have a clear image of product profitability. Odoo ERP Software and automated calculation from Odoo help keep the management of landed costs without manual complexities.

If you are either looking to simplify your landed costs functions or need an Odoo consultant to assist you with Odoo implementation, we at Bassam Infotech are here to take care of you. Our team of experts specializes in customizing Odoo ERP to your business needs.
Ready to take the war on costs into your corner and improve efficiency? Get it free? Request a quote today!