How to Manage Landed Cost in Odoo?

What is Landed Cost in Odoo?

Landed cost = Product cost + Import & logistics expenses

Odoo allows you to distribute these extra costs accurately across inventory items so that:

• Stock valuation is correct

• Profit margins are realistic

• Accounting and reporting are accurate

Modules Required

To use landed cost in Odoo, you need:

• Inventory

• Purchase

• Accounting

Typical Costs You Can Allocate

• Freight / Shipping charges

• Customs duty

• Insurance

• Clearing & forwarding charges

• Port handling / transport

• Other import-related expenses

Landed Cost Workflow in Odoo

Create a Product for Each Landed Cost

• Product Type: Service

• Invoicing Policy: Based on received quantity

• Expense Account: Import / Freight / Duty account etc.

• Enable “Is a Landed Cost” (Tick)

Purchase & Receive Products

• Create Purchase Order for goods / Purchase Order for goods & landed cost together

• Receive products into stock (Receipt validated)

Record Vendor Bills

• Vendor bill for:

  • Goods supplier

  • Goods & Landed cost supplier
  • Landed cost -Freight forwarder/Customs / clearing agent 

Accounting Impact

• Inventory value debited

• Landed cost clearing account Debited

• Fully compliant with standard accounting & audit requirements

Create Landed Cost Document

Go to Landed Cost screen: Switch automatically from the vendor bill
Manually- Inventory → Operations → Landed Costs → Create

• Select:

  • Related vendor bills

  • Picking (Receipt)

• Odoo automatically picks the stock moves

Choose Cost Distribution Method

Odoo supports multiple allocation methods:

Validate Landed Cost

Once validated:

• Inventory value increases

• Product Average / FIFO cost updates

• Accounting entries are posted automatically

Accounting Impact

• Inventory value debited

• Landed cost clearing account credited

• Fully compliant with standard accounting & audit requirements

Supported Costing Methods

• Average Cost (AVCO) ✅ (most common in UAE)

• FIFO ✅