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accountingmanufacturinginventoryWIP
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Tharindu Chathuranga

Dear Members,

I have been facing a problem in relation to Financial Reporting related to Manufacturing Function and in recognition and reflection of value of "Real WIP (Work in Progress)" Inventory.

Further explaining, due to certain circumstances, a Manufacturing Order could be held in progress or could remain in progress at the end of the period of which the rest of the process could get completed in another Financial period. As a result, such WIP inventory could have consumed a certain amount/percentage of materials, labor and other expenses at such a point of time.

In applying the above scenario in Odoo, I have not been able to identify any reflection of the cost/value of such real WIP inventory in Odoo Financial Statements in a situation the Manufacturing Order has not been completed. According to my observation, any journal entry related to manufacturing also gets posted in Odoo, only after "marking the MO as done" and till that command is executed, no Financial Transaction in relation to manufacturing is posted to ledger. As a result, it's not possible to reflect the WIP inventory in financial statements, till the MO is completed, which is not practical for manufacturing companies.

Therefore, could you please kindly advise on how to reflect the real WIP inventory value in Odoo Financial Statements prior to the "MO is marked as done" and whether such facility is available in standard module.

Your kind attention and support is highly appreciated.


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Ray Carnes (ray)
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v13 and higher


If you setup 3 step Manufacturing you will have two Transfers created that move inventory, in addition to the Manufacturing Order (job) which consumes raw material inventory and produces finished goods inventory.

  • The first Transfer, Stock --> Pre-production, stages raw materials inventory.
  • The second Transfer, Post-production -> Stock, puts finished product inventory away.

The first Transfer can be completed in full, or as products are needed for consumption.

  • If you need the value of "inventory consumed for Manufacturing Orders still open" you would review the Inventory Report, filtered for the pre-production location.
  • If you need the value for EACH open Manufacturing Order, you would review the Product Moves report, filtered for completed moves to the pre-production location.

Once you have the value(s), you can accrue the total(s) to WIP via a Manual Journal Entry. You would then also need to reverse these accruals on the 1st of the following month, since Odoo will decrease the value of raw materials inventory and increase the value of finished goods inventory once the Manufacturing Order is completed, posting through WIP if configured, and you don't want to double count anything.

Odoo 17 has new options for "Work in Progress"

Recall that we provide the planned cost via the BoM Structure & Cost report (before the MO is completed), and the actual cost via the Manufacturing Order Cost Analysis report (once the MO is completed). 



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Tharindu Chathuranga
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Hi Ray,

Thank you so much for the kind instructions. Highly appreciated.

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Lars Aam
Best Answer

You would need to have some recording of the progress. And a solution can be to confirm the part of the manufacturing that has been done, and continue with a backorder for the rest.

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Tharindu Chathuranga
Autor

Hi Lars,

Thank you so much for your instructions.

Let's assume that the user needs to get the value of such WIP, reflected in the Financial Statements (Specially in Balance Sheet as "WIP Inventory", how can we map such requirement in odoo.

On the other hand, let's assume that all the products in the MO are in progress and none of them is complete as finished goods. Considering all of such, the user may need to know the value of WIP inventory and get them reflected in Financials for the management to be informed on progress.

Your kind instructions pls.

Lars Aam

You must get some recording of what has been done or consumed. If work hours are recorded, you might have some basic to create a calculation from. If you have several operations in a single level production order, you might calculate something from which operations are complete. From the BOM you can run a report for whatever qty you have and se details of the cost of each operation, that might be a basis.
For this it would only be a calculated provision that you would reverse next month.

For materials there is only stock postings that can give you any exact value.
WIP is usually recorded as semi finished products. Which means that your production is set up as multilevel. You produce a product that is a component in the next operation step.

Tharindu Chathuranga
Autor

Hi Lars,

Thank you so much for the kind instructions. Highly appreciated.

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