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Accounting for Cost of Goods in Odoo v10
Topics
Introduction: Installing Inventory Management, Accounting & Finance, Sales
0:00:01
Examining Product Categories accounts with no chart of accounts installed
0:02:57
Installing the chart of accounts
0:03:42
Examining the default income, expense and stock accounts
0:04:24
Examples of cost of goods accounts vs other expense accounts
0:05:40
Set inventory to be perpetual. Required for automatic cost of goods reporting
0:07:13
The advantages of installing the chart of accounts after your application
0:07:56
Configuring products so they can properly journal cost of goods
0:09:34
Examining the profit and loss statements after confirming sales orders
0:11:39
Create and post invoices
0:13:00
Troubleshooting costing methods and configuration errors
0:14:12
Setting the standard price for perpetual inventory valuation
0:15:31
Accountin for Cost of Goods in Odoo Summary
0:21:09

Accounting for Cost of Goods in Odoo v10

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Odoo provides a powerful inventory system that integrates with the accounting and finance application. This video demonstrates how to setup Odoo to handle cost of goods (COG) sold.

Video Length:   24 Minutes
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Setting up Odoo to track and account for Cost of Goods

When you are running in sort of distribution, warehouse, or manufacturing operation it will often be necessary to track the cost of the goods that you sell. Like most Odoo applications, when you first install them only the most basic features are enabled. In Odoo you can configure cost of goods and have Odoo automatically create the required accounting transactions... but you have to know how to set it up.

What steps do I need to take to calculate cost of goods in Odoo?

The first thing you will need to do is make sure that inventory control and accounting & finance are properly installed in your Odoo instance. In this video example we use the sales application to sell products and properly configure Odoo to create the accounting journal entries in the cost of goods account. This is similar to a cost of revenue account but more specifically describes material items purchased for manufacturing or resell.

Better understanding of Accounting & Finance in Odoo

If you are still somewhat new to how Odoo handles accounting & finance during the sales & delivery process this video should help you better understand how the accounting transactions are created. To really understand how to implement Odoo it is critical to have a through understanding of the journal entries and how to configure product categories.

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Creating Cost of Goods Journal Entries

So if you are having trouble setting up cost of goods or other expense accounts in Odoo it is likely that you have not configured Odoo to properly create cost of goods entries. To begin you must install the following applications.

  • Accounting & Finance

  • Inventory Control

  • War

  • Sales

Additionally, to automatically create cost of goods entries you must setup perpetual inventory control. Use the product categories in Odoo to properly assign the accounts. You can double check that Odoo is properly creating the transactions by examining the journal entries for the invoice. Note that Odoo by default calls cost of goods as cost of revenue.