Stock Valuation of received products by lots/serial numbers in Odoo18
Overview
Inventory management is a critical component of effective business operations, particularly for companies dealing with physical goods. Accurate valuation of stock not only impacts financial reporting but also influences decision-making, pricing strategies, and overall business performance.
With the introduction of Odoo 18, a significant shift occurs in how inventory valuation is handled. The new system ties the valuation directly to the specific lot assigned at the time of sale. This enhancement allows businesses to achieve greater accuracy in tracking the cost of goods sold, ensuring that financial reports reflect the true value of inventory.
Configuration
To enable valuation by lots or serial numbers, begin by enabling the Lots and Serial Numbers feature. To do that, go to the Inventory app ‣ Configuration ‣ Settings, scroll down to the Traceability section, and click the box next to Lots & Serial Numbers.
After that go to Products and select a product. On the product form, in the Category field, choose a product category. Ensure the product categoriesCosting Method is set to First In First Out (FIFO)
Next, activate the product to be tracked by lots or serial numbers by ticking the Track Inventory checkbox. Then, click the adjacent field that appears, and choose either By Lots or By Unique Serial Number from the resulting drop-down menu.
Doing so makes the Valuation by Lot/Serial number checkbox appear below it. Tick that checkbox, and the configuration to track valuation by lot or serial numbers is complete.
Purchase products
Create multiple Purchase orders for the product with different unit prices.
Purchase the product at $10/unit on a lot number ‘LOT1’.
With another Purchase Order receive the product at $20/unit on lot number ‘LOT2’ .
Receive another lot at $30/unit on lot number ‘LOT3.
Go to Inventory -> Reporting -> Valuation.
Product Sale
In Odoo 18, the valuation tied to specific lots is indeed more refined. When you sell a product and validate it for LOT2, Odoo 18 will calculate the valuation based on the cost in the specific valuation layer associated with LOT2. This approach allows for more precise tracking of costs associated with individual lots.
In contrast, Odoo 17 and earlier versions handle valuation independently of lots, so the cost calculation wouldn’t distinguish between LOT1 and LOT2; instead, it would rely on the global valuation method set for the product (such as FIFO) without differentiating by lot. This improvement in Odoo 18 provides better traceability and control over costs, especially for companies managing diverse lots with varying costs.
