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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

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thank you

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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:

  1. Use Work Centers + Routings:
    • Define each process step as a Work Center.
    • Use Routings in the BoM to structure your process flow.
  2. Set Costs at Work Center Level:
    • Add hourly labor + machine cost in each work center.
    • These costs are accumulated during production.
  3. Track Costs via Manufacturing Orders:
    • Costs auto-compute based on work center time, raw materials, and operations performed.
  4. Valuation + Costing Method:
    • Use Standard or FIFO with Automated Inventory Valuation for accuracy in process accounting.

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