[IMP]: add manual valuation section
Add images and manual valuation
add ref tag and retitle doc to sentence case
Remove trailing whitespaces
update explanation
closes odoo/documentation#3981
X-original-commit: 71ede7a3d4
Signed-off-by: Zachary Straub (zst) <zst@odoo.com>
@ -11,4 +11,3 @@ Valuation Methods
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reporting/inventory_valuation_config
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reporting/using_inventory_valuation
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reporting/integrating_landed_costs
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/applications/finance/accounting/others/inventory/avg_price_valuation
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@ -1,7 +1,9 @@
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=================================
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Inventory Valuation Configuration
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Inventory valuation configuration
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=================================
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.. _inventory/inventory_valuation_config:
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All of a company's stock on-hand contributes to the valuation of its inventory. That value should
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be reflected in the company's accounting records to accurately show the value of the company and
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all of its assets.
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@ -27,32 +29,32 @@ between locations in a company's inventory.
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need to be periodically checked to ensure accuracy, and adjustments may be needed on an ongoing
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basis depending on the needs and priorities of the business.
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Types of Accounting
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Types of accounting
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-------------------
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Accounting entries will depend on the accounting mode: Continental or Anglo-Saxon.
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Accounting entries will depend on the accounting mode: *Continental* or *Anglo-Saxon*.
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.. tip::
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Verify the accounting mode by activating the :ref:`developer-mode`
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and navigating to :menuselection:`Accounting --> Configuration --> Settings`.
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Verify the accounting mode by activating the :ref:`developer-mode` and navigating to
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:menuselection:`Accounting --> Configuration --> Settings`.
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In Anglo-Saxon accounting, the costs of goods sold (COGS) are reported when products are sold or
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In *Anglo-Saxon* accounting, the costs of goods sold (COGS) are reported when products are sold or
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delivered. This means that the cost of a good is only recorded as an expense when a customer is
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invoiced for a product. Interim Stock Accounts are used for the input and output accounts, and are
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both Asset Accounts in the Balance Sheet.
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invoiced for a product. *Interim Stock Accounts* are used for the input and output accounts, and are
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both *Asset Accounts* in the balance sheet.
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In Continental accounting, the cost of a good is reported as soon as a product is received into
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stock. Additionally, a *single* Expense account is used for both input and output accounts in
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the Balance Sheet.
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In *Continental* accounting, the cost of a good is reported as soon as a product is received into
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stock. Additionally, a single *Expense* account is used for both input and output accounts in
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the balance sheet.
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Costing Methods
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Costing methods
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---------------
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Below are the three costing methods that can be used in Odoo for inventory valuation.
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- **Standard Price**: is the default costing method in Odoo. The cost of the product is manually
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defined on the product form, and this cost is used to compute the valuation. Even if the purchase
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price on a Purchase Order differs, the valuation will still use the cost defined on the product
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price on a purchase order differs, the valuation will still use the cost defined on the product
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form.
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- **Average Cost (AVCO)**: calculates the valuation of a product based on the average cost of that
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product, divided by the total number of available stock on-hand. With this costing method,
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@ -81,10 +83,11 @@ valuation method should apply.
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Under the :guilabel:`Inventory Valuation` heading are two labels: :guilabel:`Costing Method` and
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:guilabel:`Inventory Valuation`. Pick the desired :guilabel:`Costing Method` using the drop-down
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menu (e.g. :guilabel:`Standard`, :guilabel:`Average Cost (AVCO)`, or :guilabel:`First In First Out
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(FIFO)` and switch the :guilabel:`Inventory Valuation` to :guilabel:`Automated`.
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(FIFO)`) and switch the :guilabel:`Inventory Valuation` to :guilabel:`Automated`.
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.. seealso::
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:doc:`Using the inventory valuation <using_inventory_valuation>`
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:doc:`Using the inventory valuation
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</applications/inventory_and_mrp/inventory/management/reporting/using_inventory_valuation>`
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.. note::
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When choosing :guilabel:`Average Cost (AVCO)` as the :guilabel:`Costing Method`, the numerical
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@ -1,77 +1,130 @@
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=============================
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Using the inventory valuation
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=============================
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=========================
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Using inventory valuation
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=========================
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Inventory valuation refers to how you value your stock. It’s a very
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important aspect of a business as the inventory can be the biggest asset
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of a company.
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*Inventory valuation* is a quintessential accounting procedure that calculates the value of on-hand
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stock. Once determined, the inventory valuation amount is then incorporated into a company's overall
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value.
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In this documentation, we will explain how the inventory valuation works
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in Odoo.
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In Odoo, this process can be conducted manually— by warehouse employees physically counting the
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products— or automatically through the database.
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Inventory valuation: the basics
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===============================
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.. seealso::
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:ref:`Inventory valuation configuration <inventory/inventory_valuation_config>`
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Understand the basics of inventory valuation
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============================================
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In order to understand how moving products in and out of stock affects the company's overall value,
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consider the following product and stock moves scenario below.
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Receive a product
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-----------------
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Each time a product enters or leaves your stock, the value of your
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inventory is impacted. The way it is impacted depends on the
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configuration of your product (more info here).
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For example, consider an physical product, a simple *table*, which is categorized as `Office
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Furniture` in the product form's :guilabel:`Product Category` field.
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Let’s take an example with a product - a table - configured with a
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*FIFO costing method* and an automated inventory valuation.
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I purchase 10 tables at a cost of $10.
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.. image:: using_inventory_valuation/use_inventory_valuation_01.png
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:align: center
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When I’ll confirm the receipt of the products, the value of my inventory
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will be impacted. If I want to know what this impact is, I can click on
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the valuation stat button.
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Navigate to the the product category itself by going to :menuselection:`Inventory app -->
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Configuration --> Product Categories`, and on the form, set the :guilabel:`Costing Method` as `First
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In First Out (FIFO)` and the :guilabel:`Inventory Valuation` field as `Automated`.
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.. tip::
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The consignment feature allows you to set owners on your stock (discover
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more about the consignment feature). When you receive products that are
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owned by another company, they are not taken into account in your
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inventory valuation.
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Alternatively access the :guilabel:`Product Categories` dashboard by clicking on the
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:guilabel:`internal link` arrow on the individual product's form, by hovering over the
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:guilabel:`Product Category` field.
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.. image:: using_inventory_valuation/use_inventory_valuation_02.png
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:align: center
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Next, assume 10 tables are purchased at a price of $10.00, each. The :abbr:`PO (Purchase Order)` for
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those tables will show the subtotal of the purchase as $100, plus any additional costs or taxes.
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.. note::
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You need access rights on the accounting module to see that button.
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.. image:: using_inventory_valuation/purchase-order.png
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:align: center
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:alt: Purchase order with 10 tables products valued at $10 each.
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In this case, I can see that the 10 tables entered the stock for a total
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value of $100.
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After selecting :guilabel:`Validate` on the :abbr:`PO (Purchase Order)`, use the
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:guilabel:`Valuation` smart button to view how the value of inventory was impacted.
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.. image:: using_inventory_valuation/use_inventory_valuation_03.png
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:align: center
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.. image:: using_inventory_valuation/valuation-smart-button.png
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:align: center
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:alt: Valuation smart button on a receipt.
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I can also easily access the accounting entry that has been generated
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(in case of automated inventory valuation).
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.. important::
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:ref:`Developer mode <developer-mode>` must be turned on to see the *Valuation* smart button.
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.. image:: using_inventory_valuation/use_inventory_valuation_04.png
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:align: center
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.. tip::
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The :doc:`consignment </applications/inventory_and_mrp/inventory/management/misc/owned_stock>`
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feature allows ownership to items in stock. Thus, products owned by other companies are not
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accounted for in the host company's inventory valuation.
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The :guilabel:`Stock Valuation` dashboard then displays valuation of all products in the shipment,
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along with their quantities and valuation. In the example of 10 tables being purchased, the
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:guilabel:`Total Value` column of the dashboard would display a calculated valuation of $100.
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.. image:: using_inventory_valuation/stock-valuation-product.png
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:align: center
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:alt: Stock valuation page depicting the products within a shipment.
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In Odoo, automatic inventory valuation records are also recorded in the *Accounting* app. To access
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these accounting entries, navigate to :menuselection:`Accounting --> Journal Entries`, and look for
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inventory valuation entries with the `STJ` prefix in the :guilabel:`Journal` and :guilabel:`Number`
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columns, respectively.
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.. image:: using_inventory_valuation/inventory-valuation-entry.png
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:align: center
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:alt: Accounting entry for the inventory valuation of 10 tables.
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Deliver a product
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-----------------
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In the same logic, when a table will be delivered, the stock valuation
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will be impacted and you will have access to a similar information.
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In the same logic, when a table is shipped to a customer and leaves the warehouse, the stock
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valuation decreases. The :guilabel:`Valuation` smart button on the :abbr:`DO (Delivery Order)`,
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likewise, displays the stock valuation record as it does on a :abbr:`PO (Purchase Order)`
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.. image:: using_inventory_valuation/use_inventory_valuation_05.png
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:align: center
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.. image:: using_inventory_valuation/decreased-stock-valuation.png
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:align: center
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:alt: Decreased stock valuation after a product is shipped.
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The inventory valuation report
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------------------------------
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The summary of this is accessible via the inventory valuation report
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(accessible from :menuselection:`Inventory --> Reporting --> Inventory Valuation`). It gives
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you, product per product, the value of your stock. By clicking on the
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button *Inventory At Date*, you can have the same information for a
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past date.
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To view the current value of all products in the warehouse, go to :menuselection:`Inventory app -->
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Reporting --> Inventory Valuation`. The records in the table are organized by product, and selecting
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a product's drop-down menu displays detailed records with the :guilabel:`Date`,
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:guilabel:`Quantity`, and :guilabel:`Total Value` of the inventory.
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.. image:: using_inventory_valuation/use_inventory_valuation_06.png
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:align: center
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.. image:: using_inventory_valuation/inventory-valuation-products.png
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:align: center
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:alt: Inventory valuation report showing multiple products.
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.. note::
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The :guilabel:`Inventory At Date` button, located in the top-left corner of the :guilabel:`Stock
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Valuation` dashboard, shows the inventory valuation of products available during a prior
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specified date.
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Update product unit price
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~~~~~~~~~~~~~~~~~~~~~~~~~
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For any company: lead times, supply chain failures, and other risk factors can contribute to
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invisible costs. Although Odoo attempts to accurately represent the stock value, *manual valuation*
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serves as an additional tool to update the unit price of products.
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.. important::
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Manual valuation is intended for products that can be purchased and received for a cost greater
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than 0, or have product categories set with :guilabel:`Costing Method` set as either `Average
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Cost (AVCO)` or `First In First Out (FIFO)`.
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.. image:: using_inventory_valuation/add-manual-valuation.png
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:align: center
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:alt: Add manual valuation of stock value to a product.
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Create manual valuation entries on the :guilabel:`Stock Valuation` dashboard by first navigating to
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:menuselection:`Inventory app --> Reporting --> Inventory Valuation`, and then click the little gray
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drop-down icon to the left of a product's name, to then reveal stock valuation line items below as
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well as a teal :guilabel:`+ (plus)` button on the right.
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Click the teal :guilabel:`+ (plus)` button to open up the :guilabel:`Product Revaluation` form,
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where updates to the calculation of inventory valuation can be made, by increasing or decreasing the
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unit price of each product.
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.. image:: using_inventory_valuation/product-revaluation.png
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:align: center
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:alt: Product revaluation form adding a value of $1.00 with the reason being inflation.
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