Skip to Content

From Unreliable Numbers to Financial Clarity: How Odoonex Helped a Retailer Fix Inventory Valuation in Odoo

When a business scales, inventory quickly becomes its biggest asset — and its biggest headache. For one of our retail clients, the nightmare wasn’t stockouts or warehouse delays. Their problem was deeper: they couldn’t trust their numbers.

Despite using Odoo for daily operations, the client struggled with inaccurate inventory valuation and reporting. Every month-end closing turned into a battle between the warehouse team and finance.

The Problem: A Growing Gap Between Warehouse and Finance

Here’s what they faced when they first came to Odoonex:

  • Mismatched values: Odoo showed inventory worth $3.1M, while the finance team’s reconciliation suggested closer to $2.7M. The $400K gap couldn’t be explained.
  • Unclear COGS: Because stock moves weren’t properly linked to purchase costs, the cost of goods sold (COGS) was often understated or inflated.
  • Unreliable reporting: Sales reports looked profitable, but actual margins collapsed once finance corrected the numbers manually.
  • Audit stress: During year-end audits, it took weeks to reconcile books. Auditors flagged inconsistencies, raising compliance risks.
  • Incorrect product types: Some products were incorrectly set as storable when they should have been consumable, and vice versa. This caused wrong valuation entries and inflated on-hand stock values.

The CFO told us: “We had Odoo in place, but the way it was set up meant we never really trusted the data. We were making decisions blind.”

The Solution: Fixing Odoo’s Inventory Valuation Setup

When Odoonex got involved, our first step was not to add new modules — but to diagnose the root cause of the inaccurate numbers.

We discovered:

  • Valuation methods weren’t aligned with accounting.
  • Some warehouses weren’t properly configured for perpetual valuation.
  • Product categories carried inconsistent costing rules.
  • And critically, product types were misconfigured — creating wrong valuation behavior.

Our approach:

  1. Reconfigured valuation methods to match the company’s real financial practices (moving them to automated perpetual valuation).
  2. Mapped warehouses & locations correctly so every stock move updated the right accounts.
  3. Standardized product categories to ensure all items carried proper costing rules (FIFO, AVCO, etc.).
  4. Corrected product types using a custom Odoonex script.

The Script Fix: Correcting Product Types & Valuation Layers

To address the incorrect product type setup, Odoonex developed a targeted script that not only corrected the product records but also ensured all accounting entries lined up.

The script performed four key steps:

  1. Estimate product cost
    • For each misconfigured product, the script either calculated an average price based on historical purchases or applied the most recent purchase price.
  2. Correct stock valuation layers
    • Adjusted valuation layers in Odoo so they matched the corrected product type.
    • Reconciled these layers against journal entries to eliminate discrepancies.
  3. Fix cost of goods sold (COGS) entries
    • Updated past sales invoices to ensure COGS entries reflected the true cost of each product.
  4. Patch related manufacturing components
    • Applied the same correction logic to any products where the misconfigured item was used as a component in manufacturing orders.

This step ensured the fix cascaded through the system, keeping manufacturing, sales, and accounting aligned.


The Implementation Flow

The project ran in three clear phases:

  1. Audit & Diagnosis
    • We reviewed their Odoo configuration, mapped gaps, and identified product type misconfigurations and accounting mismatches.
  2. Reconfiguration & Script Deployment
    • Corrected product types and valuation methods.
    • Ran the custom script to fix valuation layers, COGS, and related manufacturing entries.
    • Trained staff to properly classify products moving forward.
  3. Validation & Monitoring
    • For two months, we monitored valuation and reconciled with finance during month-end closings.
    • Confirmed every report aligned with accounting.

Post-Implementation Results

Within 90 days of working with Odoonex:

  • Inventory valuation matched to the dollar between warehouse and finance.
  • Month-end closing time dropped from three weeks to four days.
  • COGS reporting stabilized, giving leadership real visibility into profitability.
  • Audit readiness improved — auditors validated the new process without additional adjustments.
  • System confidence restored — staff finally trusted Odoo’s numbers instead of keeping side spreadsheets.

The CFO’s words after go-live:

“For the first time in years, I have confidence in our numbers. I can make decisions without second-guessing our reports.”

Final Thoughts

ERP issues often don’t come from the software itself, but from configuration errors that ripple into accounting and reporting. In this case, incorrect product types and valuation methods caused months of frustration. By carefully reconfiguring Odoo and applying a targeted fix, Odoonex helped the retailer regain control of their financial data.

At Odoonex, our mission is simple: help businesses not just use Odoo, but trust Odoo.


Author 
Mohammad Rabi Nabizada 
Financial Analyst
odoonex.com 

07/03/2024