Inventory

The Inventory application tracks stock quantities, orchestrates receipts and deliveries, organises the warehouse into locations and puts a financial value on the goods held.

Configuring inventory

Inventory › Configuration › Settings gathers some thirty options grouped into thematic blocks. Not all of them concern every organisation: the list below points out those that shape the way the application works, and those you can leave aside at the outset.

Operations

Option	What it brings
Packages	Groups goods into an identified container (a sealed box, a wrapped pallet) whose contents are tracked through the successive operations.
Batch, Wave & Cluster Transfers	Groups several pickings into a single round for the operator, instead of one round trip per order.
Picking Policy	Sets the default behaviour on orders: Ship products as soon as available, with back orders or Ship all products at once.
Partner-Specific Instructions	Displays on the operations an instruction specific to the customer or the vendor: dock hours, access, on-site contact.
Reception Report	On receipt, shows which pending sales orders the goods can be allocated to.
Annual Inventory Day and Month	Sets the reference date of the annual count, to which the cyclic counts are attached.
Quality	Inserts control points into the transfer operations. Belongs to a separate application.

Shipping

Option	What it brings
Delivery Methods	Computes and invoices shipping costs, from rate tables or through a connection to a carrier.
Email Confirmation	Notifies the customer by email when the delivery order is validated.
Text Confirmation	Does the same by SMS. Consumes credits.
Signature	Asks for a signature on handover, kept with the delivery order.

A Shipping Connectors block then offers the carrier integrations. They compute the costs at the carrier's real rates, print the labels and bring back parcel tracking.

Four points set them apart from the other settings.

They all belong to the Enterprise edition. None is available in Community, where shipping is invoiced through the rate tables of the Delivery Methods.

Not all of them are activated here. Some appear without a checkbox, accompanied by the note (please go to Home>Apps to install): they are installed from Apps, not from this screen.

Several are specific to a country or an area. bpost addresses companies established in Belgium, USPS those operating in the United States, Envia.com Mexico and the United States. Activating a connector outside its area brings nothing: the rates and the services offered do not cover the shipment.

Each one assumes a contract with the carrier, along with credentials for its technical interface. The connector does not create the commercial relationship, it builds on it.

Traceability

Option	What it brings
Lots & Serial Numbers	Activates upstream and downstream traceability. Essential in food, pharmaceuticals, cosmetics and for any product subject to recall.
Consignment	Allows you to hold stock belonging to a third party, or to leave stock at a customer's premises, without transfer of ownership.

Warehouse

Option	What it brings
Storage Locations	Subdivides the warehouse into zones, aisles and locations. Without it, stock is known by warehouse, with no finer positioning.
Multi-Step Routes	Allows receipt and delivery flows in several steps: quality control, picking then shipping.

Advanced Scheduling

These three settings shift the dates computed by Odoo in order to absorb the unexpected.

Setting	Effect
Replenishment Horizon	How far ahead future needs are analysed, in days. A wide horizon anticipates the orders already known; a short horizon sticks to what is urgent and keeps stock down.
Security Lead Time for Sales	Brings pickings forward by a number of days, to keep a margin ahead of the date promised to the customer.
Days to Purchase	Time needed to confirm a purchase order, added to the vendor lead time.

The blocks covered elsewhere

• Barcode: activates the Barcode Scanner and the associated scanning settings.
• Products: Variants and Units of Measure & Packagings, covered in chapitre 9.
• Valuation: Landed Costs, to add an extra transport or customs cost to the value of the product (see section 15.8).
• Logistics: Dropshipping and Replenish on Order (MTO), covered in chapitre 10.

Structuring the warehouse

Creating a warehouse

1. Open Inventory › Configuration › Warehouse Management › Warehouses.
2. Click on New.
3. Fill in the name, the short name: two to five characters, carried into every transfer reference , and the address.
4. Save.

The warehouse record also carries the number of steps of its receipts and of its deliveries. That is the setting which governs the shape of the flows, and through them the number of documents created at each movement: it is covered in chapitre 16, together with the routes it puts in place.

Organising the locations

1. Open Inventory › Configuration › Warehouse Management › Locations.
2. Create the hierarchy matching the physical organisation: zones, aisles, bays, levels.
3. Provide for the service locations: receipt, quality control, output, quarantine, scrap.

Receiving

The three-step flow

When the warehouse is configured in three steps, the goods pass successively through:

1. Receipt: the delivered quantities are recorded and placed in the input location.
2. Quality control: the goods are transferred to the control area and checked. If they are not compliant, they go back to the vendor or into quarantine.
3. Storage: the accepted goods join the storage locations and become available.

Each step is validated independently. The Next Transfer smart button, at the top of the document, opens the next step directly without going back through the menus.

Partial receipt

Enter the quantities actually received, then validate. Odoo offers to create a backorder for the missing quantities, which stays pending until the follow-up delivery.

Shipping

The two-step flow

1. Picking: the items are picked from the storage locations and gathered in the output area.
2. Delivery: the parcel is made up, the transport documents are printed, the goods leave.

Partial delivery

Enter the quantities actually shipped and validate. The backorder created lets you track what remains to be delivered, and the sales order stays open as long as quantities are still due.

Replenishing

The replenishment screen, the reordering rules and their trigger are described in section 10.5.1. What follows completes that configuration with the question of lead times, which belongs to logistics.

Triggering at the latest moment

Odoo does not order as soon as the threshold is crossed: it computes the date at which the supply must be launched for the goods to arrive on time, by adding up the lead times along the chain, vendor lead time, manufacturing lead time, internal receipt lead time.

For a product whose total lead time is five days and whose need falls in ten days, the order is launched after five days, not immediately.

Lead times are set at three levels: the vendor lead time, in the Purchase tab of the product record; the manufacturing lead time, on the bill of materials; the warehouse safety lead times, in Inventory › Configuration › Settings.

Counting stock

Carrying out a physical count

1. Open Inventory › Operations › Adjustments › Physical Inventory.
2. Filter on the locations or the products to be counted.
3. Enter the quantities counted in the Counted column: the Difference column computes itself.
4. Click on Apply to adjust the stock.

Cyclic counts

Rather than one full annual count, part of the warehouse is counted at a time, at regular intervals. The workload is spread over the year and the quantities stay reliable at all times, without bringing the business to a halt for a whole day.

The frequency is set per location, on the record of each one.

1. Open Inventory › Configuration › Warehouse Management › Locations.
2. Open the location concerned.
3. Fill in the Inventory Frequency, in days: 30 for a monthly count, 90 for a quarterly one.
4. Save.

Odoo then computes the Next Expected date from the Last Inventory and the frequency. Each count applied updates the date of the last inventory, and the next one is recomputed by itself: the schedule maintains itself without intervention.

The counts due show up in the physical inventory screen, where a filter on the scheduled date isolates what is to be done.

Taking unusable goods out of stock

1. Open Inventory › Operations › Adjustments › Scrap.
2. Click on New.
3. Select the product, the quantity and the reason.
4. Validate.

The quantity leaves the available stock and joins a scrap location. The corresponding value is taken out of the stock valuation and recognised as an expense.

Tracing products

Activating traceability

1. Open the product record, General Information tab.
2. Choose the Tracking mode: - By Lots: for products manufactured or received in homogeneous groups; - By Unique Serial Number: for unit-by-unit tracking.
3. Save.

Using lots day to day

On receipt as in manufacturing, Odoo asks for the lot or serial number. On delivery, the lots actually shipped have to be designated.

To reconstruct the history of a lot, open Inventory › Products › Lots / Serial Numbers, select the lot then click the Traceability smart button.

Valuing stock

Valuing means turning the quantities held into a financial value: the one that appears in the assets of the balance sheet. Two decisions govern it: how the unit cost is established, and when the accounting entry is produced. They are taken with the accountant.

What gives an incoming movement its value

Contrary to a widespread idea, the value of incoming goods is not simply the price on the order. Odoo looks for the most reliable information available, and works down a cascade of sources until it finds something with which to value the quantity received.

1	Manual correction entered on the movement, if there is one.
↓	if quantity remains to be valued
2	Vendor bill: the amount actually billed.
↓	if quantity remains to be valued
3	Manufacturing order: the cost of the components and the operations.
↓	if quantity remains to be valued
4	Purchase order: the negotiated price, before billing.
↓	if quantity remains to be valued
5	Customer return: the value of the original outgoing movement.
↓	if quantity remains to be valued
6	Product cost: the value carried by the product record.
+	Landed costs: transport, customs, insurance, added on top.

Choosing the costing method

The Costing Method determines how the unit cost is established and, through it, what the remaining stock is worth.

Method	Principle
Standard Price	The cost is a value set by hand on the product record. No movement recomputes it. The differences with the price actually paid are recognised separately, on a dedicated account.
Average Cost (AVCO)	The cost is recomputed at each receipt, in proportion to the quantities. It smooths out variations in purchase price.
First In First Out (FIFO)	Each receipt forms a layer that keeps its price. Outgoing movements consume the layers in order of arrival.

Standard price

The cost is a decision, not an observation: you set it on the product record, and it only moves if you change it. Incoming and outgoing movements are counted at that value, whatever the price actually billed.

The difference between the price paid and the cost retained does not disappear for all that: it is recognised on the price difference account, where it can be read and analysed separately. That is precisely the point of the method: to isolate the drift in purchase prices instead of diluting it in the value of the stock.

When to choose it. A production whose theoretical cost price is known and which you want to compare with the actual one. A catalogue of components with stable prices. A need for predictable costs for margin computation.

Average cost (AVCO)

At each receipt, Odoo recomputes the cost as the weighted average of what is held and what has arrived. Outgoing movements are counted at that cost, but do not change it: only receipts move it.

An increase in purchase price therefore feeds through gradually, damped by the stock already held. Receiving a hundred units at €20 while holding a thousand at €10 only brings the cost to €10.90.

When to choose it. The most common case. Interchangeable items, bought regularly at prices that fluctuate moderately, where it is neither useful nor possible to distinguish one supply from another.

First in first out (FIFO)

Each receipt forms a layer, which keeps its entry price. Outgoing movements consume the layers in order of arrival: the oldest first, then the next.

The remaining stock is therefore valued at the most recent prices, which makes this the method closest to economic reality , and the only one to give, in a period of rising prices, a balance sheet value consistent with the replacement cost.

When to choose it. Goods with volatile prices, where the gap between supplies is significant. An accounting or tax requirement to track by layers. Products for which you want the margin shown to reflect the real cost of what has been sold.

Choosing when the entry is made

The Inventory Valuation decides when accounting records the stock variations.

Mode	Behaviour
Periodic (at closing)	No entry is produced as movements occur. The stock value is tracked in Inventory, and an adjustment entry is posted at the closing of the period.
Perpetual (at invoicing)	Entries are produced as you go, as the purchase and sales invoices are posted. The stock account reflects the value at all times.

Setting it up

The two settings are made on the product category, which also carries the accounts.

1. Open Inventory › Configuration › Products › Categories.
2. Select the category.
3. Fill in the Costing Method: Standard Price, Average Cost (AVCO) or First In First Out (FIFO).
4. Fill in the Inventory Valuation: Periodic (at closing) or Perpetual (at invoicing).
5. In perpetual valuation, check the Stock Account and the Stock Variation.
6. In Standard Price combined with perpetual valuation, a Price Difference Account is added: fill that one in as well.
7. Save.

Valuing by lot

The Valuation by Lot/Serial option on the product record refines the computation: each lot keeps its own value, instead of being merged into the product cost.

It is justified when the lots have genuinely different entry costs: vintages, supplies from distinct origins, materials whose price varies sharply.

What moves the value

Four families of events change the value of the stock.

Event	Effect
An incoming movement	Adds the value determined by the cascade described above, and recomputes the unit cost in AVCO as in FIFO.
An outgoing movement	Removes the corresponding value: at average cost, at the oldest layer, or at standard price depending on the method.
A vendor bill	Revalues the receipts it covers, if its amount differs from the price ordered.
An inventory adjustment	Recognises a quantity discrepancy and the corresponding value.

The case of negative stock

Odoo does not forbid shipping goods it does not hold. Validating a delivery with no stock available works: the quantity goes negative, and nothing stands in the way.

That flexibility is useful (it lets you ship without waiting for a forgotten receipt to be entered) but it has a price, and that price falls precisely on valuation.

The consequences go beyond valuation. Negative stock distorts the computation of needs, since replenishment starts from a quantity that does not exist; it makes the physical count hard to reconcile; and it hides the original error, which is almost always a receipt not entered or an outgoing movement recorded twice.

To this are added the landed costs (transport, customs, insurance) which spread a cost invoice over the receipts concerned and are added to the value of the stock. They assume the Landed Costs option is active.

Analysing

Built-in reports

The Reporting menu of Inventory gives access to the standard analyses.

Report	What it shows
Stock	The quantities held per product, with the on-hand, reserved and forecast figures.
Locations	The detail of the stock location by location, down to the lot. This is the view to use to find out where goods are.
Moves History	The detail of each incoming and outgoing movement, line by line: which product, which quantity, from where to where, when, under which document.
Moves Analysis	The same data aggregated, to be crossed by period, product, category or operation type. This is the view of trends, where the previous one is the view of facts.
Performance	The indicators of lead time compliance and service quality.

Logistics dashboards

Three ready-to-use dashboards complete these reports.

1. Open the Dashboards application.
2. In the left-hand panel, select the Logistics section.
3. Choose the dashboard you want: - Warehouse Daily Operations: progress of the tasks and of the scheduled activities; - Operation analysis: logistics efficiency indicators; - Warehouse Metrics: stock value and quantity.

Key points

• Define the warehouse structure before entering the first movement.
• Only add receipt or delivery steps where a real check takes place.
• Fill in realistic lead times: they govern all the automatic triggers.
• Prefer regular cyclic counts to a single annual inventory.
• Set the valuation method with the accountant, before going live.