Accounting and Invoicing - Odoo

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Inventory valuation

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Learn everything you need to grow your business with Odoo, the best open-source management software to run a company, at https://www.odoo.com/r/NlF In this video, learn how about the different ways to value inventory, including through manual vs automated valuation methods and through standard cost, AVCO, and FIFO costing methods. Other lessons related to this video: - Inventory valuation (Continental) https://www.youtube.com/watch?v=rjyRpnp8hlI - Inventory valuation (Anglo-Saxon): https://youtu.be/WDxmu3tuoiw Need more information about Odoo apps? https://www.odoo.com/r/cfi Discover Odoo, schedule a demo, or start your own Odoo revolution for free (no credit card required), at https://www.odoo.com/r/kASR

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1. What is the difference between a "Costing Method" and a "Removal Strategy" in Odoo?

Costing methods determine which physical product leaves the shelf, while removal strategies determine the financial value. Costing methods determine how we value products entering and exiting inventory, while removal strategies determine which physical unit is picked. Costing methods are only for sales, and removal strategies are exclusively for purchasing raw materials.

2. How does the "Automated (Perpetual)" valuation method benefit the accounting team?

Odoo creates journal entries automatically whenever products enter or leave the inventory, keeping the valuation up to date. It automatically calls the vendors to negotiate a lower price whenever the stock level is low. It forces the accountants to manually type every single inventory movement into a physical ledger book.

3. In the FIFO (First-In, First-Out) costing method, what value is removed from inventory when a product is sold?

The average price of all identical products currently stored in the warehouse. The most recent price paid for the last unit that arrived in the stock. The value of the very first unit that entered the inventory.

Accounting and Invoicing - Odoo

Inventory valuation

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