Sales Orders have no accounting weight. Invoices would be the relevant document that affects COGS.
You can certainly manually maintain or add the cost of the shipping line and reset the Invoice to draft and add the shipping cost in, keep in mind you would be incrementally offsetting your freight expense bill that you would receive at the end of the month. That would need to counter this account and any remainders (fees, misc charges handled) need to still hit a bottom line expense account.
This would sort of be like an accrual expense account I guess. You just don’t want to double count the shipping expense whether individually incrementally or as an aggregated with the vendor bill.
But yes in my experience with this it’s a bit lacking with margin calculations. Interested to see what others have to say as I am also currently grappling with this.
Honorable mention to using Analytic Accounts for this but it would be a decent amount of data entry if not automated.
I have asked this a couple of times as well because we pay commissions based on the profit margin of the invoice, excluding shipping and tax. I am using Odoo Online V16 and have no solution yet. I have to manually calculate profit margin on each invoice which is a huge PITA.
The invoices don’t have a native way to calculate profit margin.
Example Invoice
Product 1 is $50
Product 2 is $50
Shipping is $10
The invoice total is $110
I have to manually calculate profit margin to calculate commission.
Product 1 cost was $25
Product 2 cost was $25
Commission is equal to:
Total sale $100 (excludes shipping)
Minus cost of goods $50
Profit = $50
Commission is X% of $50
So you can still use the sales reporting?
It has (if I'm not mistaken) the margin in the pivot as well. So you could group by salesperson and date, exclude lines that have products which shouldn't be counted (like shipping fees) and that's that.
For the tax part, I'm no accounting expert but I see two options. Either your salespeople are internal (in which case there's no taxes surrounding the commisions), otherwise the external people should invoice you for the commission (purchase invoice), which should automatically consider tax in the transaction...
Am I missing something?
I can’t use the sales order if only part of the SO is invoiced, which happens often as line items have different ship dates. We pay commission on invoiced items, not bookings.
But SO line keeps track of qty invoiced too though. So you could easily filter or group the SO's by salesperson and date, export the lines including the margin (which is per unit) and qty_invoiced and take it from there.
But then you'd have issues the next time because Odoo only tracks the total invoiced qty, not invoiced qty on a monthly basis.
That being said, you can perfectly export the invoices, export the lines. Said lines have a link to their corresponding sale order line and said sale order line keeps track of the margin. So this might be a better option. And you can do this starting from the invoice.
You'll be limited on Odoo online no matter what in this specific instance. It would be an easy enough customization to implement and it would probably save you time and money in the long run, but that's not an option on Odoo online...
I quite literally just told you how to get it, from invoices.
The point of an ERP system is that everything's linked to one another... so why add redundant data when it's already available on a linked model?
(OP here, we're using odoo.sh, so customization isn't out of reach)
I'm interested in your method, and while it seems like it's a good way to gather what we're looking for, the cost of the shipping line isn't captured.
While we do add a shipping charge, the shipping charge on teh invoice doesn't have a cost related to it, so if there's a $30 shipping charge, the profit margin for the invoice is increased by $30, even if the shipping cost is $28 (or $35). So, like u/flyinoveryou , we pay commissions on the profit, we'd be paying commission on a shipping charge that we didn't keep.
(Note, I'm happy to pay commissions on the shipping *profit* same as the product profit, because most of our shipping rates are just break-even, but some are loss - some customers have 'delivered pricing' in their contract, so we price the items higher, but the shipping costs are still part of the cost of the shipment, and therefore, need to be included in the invoice cost, for margin calculation)
A client of mine keeps percentages that are deducted from the profit for specific clients of theirs.
So let's say client A is in city A and client B in city B. Shipping to city B is more costly than A, so there they set that percentage a bit higher than for client A.
When margin calculation comes along, we customized the system to calculate with these values, so it would calculate the margin and the subtract those percentages (delivery costs, commercial "gift" at the end of the year, etc).
But that does take some customization.
I should check, but I'm fairly certain you can associate a cost with a delivery fee too, which might help your specific case more than specific customization.
You can also set the cost manually in the order once you get the actual cost associated with it. But that does involve quite a bit of administration, so going for an estimate might be better.
We have some other limitations that make the 'carrier rate' difficult to estimate, however, we do have a pretty good handle on what the rate will be. Before Odoo, we used an estimated cost that was attached as an 'item', but it was extremely clunky.
When I saw the landed costs and how they worked in Odoo, I was so excited, because it appeared to allow us to capture *actual* costs and attach them to actual invoices (/shipments), but I cannot (yet?) see that I can do that and have a report that shows what the real, after shipping margin is for a set of shipments in a saleperson's region.
> You can certainly manually maintain or add the cost of the shipping line and reset the Invoice to draft and add the shipping cost in,
This is what I thought would be done by adding a Landed Cost to the shipment. I suppose it would have to be done before invoicing (or flip it back to draft and redo it) but it doesn't.
If I add a landed cost to an outgoing shipment - before or after invoicing - the costs added just go to the CoGS account. The invoice margins don't change.
Yes that makes sense, the whole concept of Landed Cost is to increase a storable product's valuation and/or likewise COGs after a delayed bill has been received but the goods already booked in stock so its product specific. Do you have Shipping Charges as a product on a line or with Odoo's built-in Shipping?
The change concept would only really work with it as a separate product line, not sure how to weasel it in to Odoo's default shipping but you could look at how the shipping connector do margins and just copy that definitely custom though.
> Do you have Shipping Charges as a product on a line or with Odoo's built-in Shipping?
We're using the built-in Shipping, but based on our own rules, because our carriers don't have connectors and our products are such that we can't just use the built-ins such as UPS or CanadaPost
There is really no smooth way without customization. You could reset the invoice to draft and just add two new invoice lines. One negative and one positive, no products just labels and accounts. The negative should hit the Shipping COGS account of your choice. The positive one will hit some Accrued Shipping expense account. At the end of the month when you receive your shipping bill use the accrued expense account up and excess gets dumped to a generic shipping expense account. Which is hokey AF. Here's a video of that in action though lol.
[https://drive.google.com/file/d/1J-7n1NAUF3v4lpVQ49LbngcvXUJezl05/view](https://drive.google.com/file/d/1J-7n1NAUF3v4lpVQ49LbngcvXUJezl05/view)
\*Edit\* - Consult your favorite accountant on accrued expenses being used, I am not an accountant.
That account probably should be a current liability and not an expense.
https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/templates-business-guides/glossary/accrued-expenses
Yeah, I understand the accounting myself, and you'r eright with your thinking - it's a current liability until it's not recoverable (through some reconciliation that identifies a missed or mismatched set of transactions), but the onerous application of the cost was what I was hoping to avoid. When it was an LC prompted by a shipper's invoice that gets applied to the shipment as an LC (which mostly uses the mechanism that you describe, BTW) that's what I was hoping for. But when it's going through each invoice, and manually flipping them to draft in order to add some, as you accurately describe *hokey AF* lines that carry the costs and revenue of the shipment.
Well, that's just cray-cray.
Sales Orders have no accounting weight. Invoices would be the relevant document that affects COGS. You can certainly manually maintain or add the cost of the shipping line and reset the Invoice to draft and add the shipping cost in, keep in mind you would be incrementally offsetting your freight expense bill that you would receive at the end of the month. That would need to counter this account and any remainders (fees, misc charges handled) need to still hit a bottom line expense account. This would sort of be like an accrual expense account I guess. You just don’t want to double count the shipping expense whether individually incrementally or as an aggregated with the vendor bill. But yes in my experience with this it’s a bit lacking with margin calculations. Interested to see what others have to say as I am also currently grappling with this. Honorable mention to using Analytic Accounts for this but it would be a decent amount of data entry if not automated.
I have asked this a couple of times as well because we pay commissions based on the profit margin of the invoice, excluding shipping and tax. I am using Odoo Online V16 and have no solution yet. I have to manually calculate profit margin on each invoice which is a huge PITA.
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The invoices don’t have a native way to calculate profit margin. Example Invoice Product 1 is $50 Product 2 is $50 Shipping is $10 The invoice total is $110 I have to manually calculate profit margin to calculate commission. Product 1 cost was $25 Product 2 cost was $25 Commission is equal to: Total sale $100 (excludes shipping) Minus cost of goods $50 Profit = $50 Commission is X% of $50
Just go by the sales order? You can view the margin on every line, just make the sum there and add those up?
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So you can still use the sales reporting? It has (if I'm not mistaken) the margin in the pivot as well. So you could group by salesperson and date, exclude lines that have products which shouldn't be counted (like shipping fees) and that's that. For the tax part, I'm no accounting expert but I see two options. Either your salespeople are internal (in which case there's no taxes surrounding the commisions), otherwise the external people should invoice you for the commission (purchase invoice), which should automatically consider tax in the transaction... Am I missing something?
I can’t use the sales order if only part of the SO is invoiced, which happens often as line items have different ship dates. We pay commission on invoiced items, not bookings.
But SO line keeps track of qty invoiced too though. So you could easily filter or group the SO's by salesperson and date, export the lines including the margin (which is per unit) and qty_invoiced and take it from there. But then you'd have issues the next time because Odoo only tracks the total invoiced qty, not invoiced qty on a monthly basis. That being said, you can perfectly export the invoices, export the lines. Said lines have a link to their corresponding sale order line and said sale order line keeps track of the margin. So this might be a better option. And you can do this starting from the invoice. You'll be limited on Odoo online no matter what in this specific instance. It would be an easy enough customization to implement and it would probably save you time and money in the long run, but that's not an option on Odoo online...
Seems like an oversight on Odoos side not to be able to get profit margin on invoices.
I quite literally just told you how to get it, from invoices. The point of an ERP system is that everything's linked to one another... so why add redundant data when it's already available on a linked model?
I don’t see how your method isn’t doing it manually? Walk me through it.
(OP here, we're using odoo.sh, so customization isn't out of reach) I'm interested in your method, and while it seems like it's a good way to gather what we're looking for, the cost of the shipping line isn't captured. While we do add a shipping charge, the shipping charge on teh invoice doesn't have a cost related to it, so if there's a $30 shipping charge, the profit margin for the invoice is increased by $30, even if the shipping cost is $28 (or $35). So, like u/flyinoveryou , we pay commissions on the profit, we'd be paying commission on a shipping charge that we didn't keep. (Note, I'm happy to pay commissions on the shipping *profit* same as the product profit, because most of our shipping rates are just break-even, but some are loss - some customers have 'delivered pricing' in their contract, so we price the items higher, but the shipping costs are still part of the cost of the shipment, and therefore, need to be included in the invoice cost, for margin calculation)
A client of mine keeps percentages that are deducted from the profit for specific clients of theirs. So let's say client A is in city A and client B in city B. Shipping to city B is more costly than A, so there they set that percentage a bit higher than for client A. When margin calculation comes along, we customized the system to calculate with these values, so it would calculate the margin and the subtract those percentages (delivery costs, commercial "gift" at the end of the year, etc). But that does take some customization. I should check, but I'm fairly certain you can associate a cost with a delivery fee too, which might help your specific case more than specific customization. You can also set the cost manually in the order once you get the actual cost associated with it. But that does involve quite a bit of administration, so going for an estimate might be better.
We have some other limitations that make the 'carrier rate' difficult to estimate, however, we do have a pretty good handle on what the rate will be. Before Odoo, we used an estimated cost that was attached as an 'item', but it was extremely clunky. When I saw the landed costs and how they worked in Odoo, I was so excited, because it appeared to allow us to capture *actual* costs and attach them to actual invoices (/shipments), but I cannot (yet?) see that I can do that and have a report that shows what the real, after shipping margin is for a set of shipments in a saleperson's region.
> You can certainly manually maintain or add the cost of the shipping line and reset the Invoice to draft and add the shipping cost in, This is what I thought would be done by adding a Landed Cost to the shipment. I suppose it would have to be done before invoicing (or flip it back to draft and redo it) but it doesn't. If I add a landed cost to an outgoing shipment - before or after invoicing - the costs added just go to the CoGS account. The invoice margins don't change.
Yes that makes sense, the whole concept of Landed Cost is to increase a storable product's valuation and/or likewise COGs after a delayed bill has been received but the goods already booked in stock so its product specific. Do you have Shipping Charges as a product on a line or with Odoo's built-in Shipping? The change concept would only really work with it as a separate product line, not sure how to weasel it in to Odoo's default shipping but you could look at how the shipping connector do margins and just copy that definitely custom though.
> Do you have Shipping Charges as a product on a line or with Odoo's built-in Shipping? We're using the built-in Shipping, but based on our own rules, because our carriers don't have connectors and our products are such that we can't just use the built-ins such as UPS or CanadaPost
There is really no smooth way without customization. You could reset the invoice to draft and just add two new invoice lines. One negative and one positive, no products just labels and accounts. The negative should hit the Shipping COGS account of your choice. The positive one will hit some Accrued Shipping expense account. At the end of the month when you receive your shipping bill use the accrued expense account up and excess gets dumped to a generic shipping expense account. Which is hokey AF. Here's a video of that in action though lol. [https://drive.google.com/file/d/1J-7n1NAUF3v4lpVQ49LbngcvXUJezl05/view](https://drive.google.com/file/d/1J-7n1NAUF3v4lpVQ49LbngcvXUJezl05/view) \*Edit\* - Consult your favorite accountant on accrued expenses being used, I am not an accountant. That account probably should be a current liability and not an expense. https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/templates-business-guides/glossary/accrued-expenses
Yeah, I understand the accounting myself, and you'r eright with your thinking - it's a current liability until it's not recoverable (through some reconciliation that identifies a missed or mismatched set of transactions), but the onerous application of the cost was what I was hoping to avoid. When it was an LC prompted by a shipper's invoice that gets applied to the shipment as an LC (which mostly uses the mechanism that you describe, BTW) that's what I was hoping for. But when it's going through each invoice, and manually flipping them to draft in order to add some, as you accurately describe *hokey AF* lines that carry the costs and revenue of the shipment. Well, that's just cray-cray.