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Manufacturing - accounting full work flow

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accountingmanufacturing
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Mostafa Torkamani

I’m dealing with the integration of accounting and Odoo’s manufacturing system. When following a full cycle—from purchasing raw materials, moving them to the production warehouse, producing a final product, returning the final product to inventory, and eventually selling it—everything on the production side is manageable. However, I’m facing an accounting issue. 

When we purchase raw materials, the accounting is clear: it reflects in our payables and raw materials account. When we send them to production, they should move from raw materials inventory to work-in-progress. When the final product is completed and returned to inventory, the finished goods should be accounted for, along with production costs. When we sell the product, the finished goods inventory should decrease, and the cost should be reflected in the Cost of Goods Sold. 

My issue is that Odoo doesn’t seem to automatically generate an accounting entry when the final product returns to inventory. Could someone guide me on how to address this in Odoo?

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Codesphere Tech

Hello,
Can you please mention the odoo version?

Codesphere Tech

The "Automated" option is provided in Odoo 18 but it replaced with a "Perpetual" option in V19.
In 19: Ensure your Product Category has the Stock Valuation Account and Stock Input Account configured. The system will then treat the "Return to Inventory" as a value-adding event automatically.
Hope this helps
Thanks

Codesphere Tech

Can you please check the cost of the finished product? also suggest to check into inventory valuation report for produced item show up there with a value or not ?. Let me know here

Codesphere Tech

It is very pleased to know that your issue has been resolved now.

Avatar
Vivek Kundaliya
Meilleure réponse

For the community benefit - here is the complete Manufacturing Accounting Workflow for Odoo 19:

Prerequisites (Critical Configuration):
1. Go to Inventory > Configuration > Product Categories
2. Set Inventory Valuation to "Automated" (called "Perpetual" in some v19 builds)
3. Configure: Stock Input Account, Stock Output Account, Stock Valuation Account
4. Go to Inventory > Configuration > Locations > Production location > set Production Account (WIP)

Full Accounting Flow:

1. Purchase Raw Materials
Receipt: DR Stock Valuation | CR Stock Interim (GR/IR)
Bill: DR Stock Interim | CR Accounts Payable

2. Raw Materials Consumed in Manufacturing
DR WIP/Production Account | CR Raw Material Stock Valuation
(This entry is created automatically when components are consumed in the MO)

3. Finished Goods Completed (MO Mark as Done)
DR Finished Goods Stock Valuation | CR WIP/Production Account
(This is the "return to inventory" entry - it IS created automatically when you click "Mark as Done")

4. Sell the Product
DR Cost of Goods Sold | CR Finished Goods Stock Valuation

If entries are not appearing, check:
- Product category on the raw material AND finished goods must both be set to Automated valuation
- All stock accounts must be configured on the product category
- The costing method must be AVCO or FIFO (Standard Price also works)
- In Odoo 19, check Inventory > Reporting > Inventory Valuation to confirm stock layers are created

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Ignorer
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Cybrosys Techno Solutions Pvt.Ltd
Meilleure réponse

Hi,

In Odoo 19, accounting entries in manufacturing depend on Automated Inventory Valuation.

Ensure product categories are configured with correct accounts (Stock Valuation, Input, Output, and Production/WIP).

When raw materials are consumed in an MO, their value moves from stock to WIP automatically.

On MO completion (Mark as Done), Odoo transfers total production cost to finished goods inventory.

There is no separate journal entry for “return to inventory”; it is part of the MO completion valuation.

All entries are generated via stock valuation layers, so check those if journal entries are not visible.


Hope it helps.

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Ignorer
Mostafa Torkamani
Auteur

Hi Cybrosys,

Thank you for the response, but your mentioned work flow does not run in my instance, even though I have configured required accounts in category. it seems that valuation report does not exist in v19 anymore, where journal entries were created automatically in older versions

Avatar
Mostafa Torkamani
Auteur Meilleure réponse

Hi Codesphere Tech,

odoo.sh v19

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Ignorer
Mostafa Torkamani
Auteur

Thank you Codesphere Tech,

I have set all required accounts in category, but I do not see journal entries when I start production (consume raw material) and when I close production (increasing the finished product account).

Mostafa Torkamani
Auteur

Hi Codesphere Tech,
Thank you for your support, my issue has been solved yet.

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