how to use process costing
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Hi,
In Odoo 18 Enterprise, process costing (a method of tracking costs for mass-produced products through different stages or processes) can be managed primarily through the Manufacturing, Inventory, and Accounting modules. While Odoo does not provide a module named "Process Costing" directly, it supports process costing logic through its Work Centers, Bill of Materials (BoM), Routing, and Cost Structure features.
Here’s how you can implement process costing in Odoo 18 Enterprise:
1. Install Modules
Go to Apps and install:
Manufacturing
Accounting
Inventory
2. Create Work Centers (Processes)
Each step like Mixing, Heating, or Packing is a Work Center.
Go to Manufacturing > Configuration > Work Centers
Create a work center for each process
Set the cost per hour
3. Create Routing
Routing tells Odoo the process flow.
Go to Manufacturing > Configuration > Routings
Add steps like Mixing → Heating → Packing
Link each step to a Work Center
4. Create Bill of Materials (BoM)
BoM tells Odoo what materials are used.
Go to Products > Bill of Materials
Select your product
Add the materials
Link the Routing
5. Create a Manufacturing Order
Go to Manufacturing > Operations > Manufacturing Orders
Create a new order
Follow the steps (work orders) one by one
Odoo will track the cost per process
6. View Cost
After completing the order, open it
Go to the Cost Analysis tab
You will see:
Material cost
Labor/process cost
Total cost
Odoo will calculate costs at each process step using your settings.
Hope it helps
thank you
Process Costing is used when products are manufactured through a continuous process (e.g., chemicals, textiles, food production).
In Odoo 18 Enterprise, you can manage this by:
-
Use Work Centers + Routings:
- Define each process step as a Work Center.
- Use Routings in the BoM to structure your process flow.
-
Set Costs at Work Center Level:
- Add hourly labor + machine cost in each work center.
- These costs are accumulated during production.
-
Track Costs via Manufacturing Orders:
- Costs auto-compute based on work center time, raw materials, and operations performed.
-
Valuation + Costing Method:
- Use Standard or FIFO with Automated Inventory Valuation for accuracy in process accounting.
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