Many businesses think they know the true cost of their inventory.
In reality, they often don’t.
If your business imports products or purchases goods with additional expenses such as freight, shipping, customs duties, insurance, or handling charges, recording only the supplier’s invoice means your inventory value is understated. This can distort profit margins, inventory valuation and financial reporting.
This is where Odoo Landed Costs become a game changer.
As an experienced Odoo Partner Australia and Odoo Developer, we’ve seen many businesses improve inventory accuracy simply by implementing landed costs correctly.
What Are Landed Costs in Odoo?
Landed Costs allow businesses to include all procurement-related expenses in the inventory value of purchased products.
Instead of valuing inventory based only on the purchase price, Odoo allocates additional costs such as:
Freight and shipping
Customs duties
Import taxes
Insurance
Container handling
Port charges
Local transportation
Warehousing costs (where applicable)
The result is a more accurate inventory valuation that reflects the true acquisition cost of every product.
Why Does This Matter?
Imagine purchasing inventory for A$100,000.
You then incur:
Freight: A$8,000
Insurance: A$2,000
Customs & import charges: A$5,000
Your real inventory cost isn’t A$100,000.
It’s A$115,000.
Without Landed Costs, your inventory appears cheaper than it actually is. This can lead to:
Incorrect gross profit calculations
Misleading inventory values
Poor pricing decisions
Inaccurate financial reports
Underestimated cost of goods sold
For wholesalers, distributors, manufacturers, and importers, these errors can significantly affect business decisions.
How Odoo Automatically Handles Landed Costs
Odoo simplifies what is often a manual accounting process.
Once goods are received, Landed Costs can be allocated across inventory based on different methods, including:
Equal distribution
Quantity
Current product value
Weight
Volume
After validation, Odoo automatically:
Updates inventory valuation
Adjusts stock value
Creates the necessary accounting journal entries
Maintains an accurate audit trail
This reduces manual work while improving financial accuracy.
Important Requirements
Landed Costs are supported when products use:
FIFO (First In, First Out) costing, or
Average Cost (AVCO)
Additionally, Automated Inventory Valuation must be enabled so Odoo can generate the inventory and accounting adjustments automatically.
When configured correctly, businesses gain real-time inventory values without complex spreadsheets or manual calculations.
Why Australian Businesses Choose Odoo
More Australian businesses are adopting Odoo because it combines ERP, accounting, inventory, CRM, manufacturing and purchasing into a single integrated platform.
Instead of relying on disconnected software, businesses can manage operations from one system while ensuring inventory reflects actual acquisition costs.
For importers and businesses with international supply chains, this functionality provides greater confidence in financial reporting and pricing decisions.
Choosing the Right Odoo Partner Australia
Implementing Odoo successfully is about more than installing software.
A knowledgeable Odoo Partner Australia understands business processes, accounting principles and inventory management, while an experienced Odoo Developer can tailor workflows, automate processes and build custom modules to suit your operations.
Whether you need advanced inventory management, API integrations, custom development or industry-specific solutions, working with the right implementation team can maximise your return on investment.
Looking for an Affordable Odoo Solution?
Every business has unique requirements.
The best ERP implementation isn’t necessarily the most expensive—it’s the one designed around your workflows.
An Affordable Odoo solution should deliver scalability, automation, and long-term value without unnecessary complexity or excessive customisation.
With the right implementation strategy, Odoo becomes far more than an ERP system—it becomes the central platform that connects your inventory, accounting, purchasing, sales and operations into one intelligent business ecosystem.
Need an experienced Odoo Partner Australia or Odoo Developer? Our Wistec team helps Australian businesses implement, customise and integrate Odoo ERP with practical, cost-effective solutions that grow alongside your business. WhatsApp 0410829900