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Purchase Management

Purchase management is an important business automated solution and discipline that facilitates a business entity to take care of the purchasing procedures and strategies which in turn will generate hikes in the profits of the business. This is a very crucial part of a business. The more we give heed to purchase activities, the more hike in business profits, which is the ultimate goal of any business. The inaccuracies from the purchasing department of a company could be affected consequently in production and sales segments.

Purchasing is buying any products, raw materials, or services. Odoo’s purchase management application upgrades the purchase functions of a business or firm based on the inventory standards, requirements, and sales orders.

The strategies of purchasing procedures include the knowledge of the product needed and the quality of the product. Then the strategy comes from the comparison of the needed product, price of the product, and quality with different suppliers. After comparing the price, quality of the product with different suppliers, we can approve the purchase order. The last phase is that the customer and supplier work out the terms and conditions of the purchase agreement. This stage will also make a relationship with this supplier to keep alive or not.

Product Management

It is well known that in the purchasing process, the product has a very important and central role to take part. So in the Odoo purchase module, product management is considered as the inevitable part.

Creating Products

The most essential part, creating products is a simple and easy task in the Odoo purchase module. The platform will help you to efficiently manage all the activities related to product management like creating and describing products and their variants and all other activities associated with product management. Creating products using this platform will enhance immediate and professional buying.

Now let us discuss how to create products using this module.

Firstly, you move to the Products menu in the purchase module. You can see the product menu in the menu bar. Click on the menu and select the products.

Purchase -> Products -> Products.

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When you click on the products menu, a new window will open as seen below.

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In this window, you can see all the created products in a well-arranged manner.

This is the kanban view of the product.

you can also view this in List view.

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For creating New products, click on the Create button.

When you click on the create button you will be depicted with a new window as shown below:

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Here in this product creating a form, you can provide all the product information such as Product name, can be sold, can be purchased.

You can add the image of the product. It will help to get a clear picture of the product.

Let us consider the different fields for adding product information.

Product name: you can add a name for the product. This name will be displayed in all other stages related to this product.

Can be sold: This can be sold option is more suitable for creating raw materials or for consumable products. If you give a tick mark on the checkbox, you can select the product in the Sale Order Line.

Under the General Information tab, you can see the following options.

Product Type: There are three available options in product type.

  • Consumable product
  • Storable product
  • Service product

Consumable Products: Consumable products is the type of products which is treated as a storable product with the exception that the stock is not maintained in the server.

Storable Product: Storable products are the type of products that the user can keep in stock. Storable product is the product used in stock management and its replenishment is more or less automated as defined by the rules established in the system and is needed an inventory to keep on that product. In storable products, you can easily manage your minimum stock level by defining reordering rules for stock in your system. So there is no chance for out of stock. If you do not set the Reordering rule, Odoo ERP will show a warning message in quotation about the details of out of stock.

Odoo ERP will prevent processing delivery orders that don’t have balance in the stock and it can be processed only by force availability button in the delivery order.

Service Product: Service product is a nonmaterial product. This is the service that you provided to your customers.

Product category: In this product category option, there is a dropdown menu where one can choose the product category and also can create and edit new categories.

Internal Reference: Internal Reference is the alternative product code that is used by the company to identify their product easily.

Barcode: You can provide the barcode of the products. The barcoding system will help to reduce human efforts and human errors.

Sales Price: This is the selling price of the product.

Customer Taxes: Customer taxes are the default taxes used when selling the product.

Here you have the dropdown option.

Cost: The value of the product.

Company: The user can mention the company details if the platform is operating on a multi-company basis.

Internal Notes: Under the Product Variants Tab, you can deal with the products having product variants. That means, it is used to manage products having disparities in size, shape, color, etc.

The below is the product variants tab

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When you click on the Attributes button, you will get a drop-down window. There you can create attributes.

With Odoo, one can easily set the attribute type and attribute values.

Under the Sales tab, you have the invoicing fields.

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Invoicing Policy

Odoo platform allows you to define the invoicing policy on which the product should be invoiced based on the ordered quantity or delivered quantity. You can choose any of this policy which is suitable for your business type. In ordered quantities, the customer will be invoiced once the business request is affirmed. This is used as the default mode in Odoo sales.

On the delivered quantities basis, the clients or customers will be invoiced once the delivery is done. This policy was suitable for businesses that sell materials, liquids, or food items in large quantities. In the cases of these items, there is a chance of having slight differences in the quantity. Therefore the invoice the quantity delivered actually.

If you are enabling the delivered quantities option you won't have the option to activate the feature called Automatic invoice where the invoices are generated automatically after the online payment is confirmed.

Sales description: Sales description is the details or description of the product that you want to give to your customers.

Under Purchase Tab, the menus like vendor, agreement, company, quantity,the price could be seen.

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In the vendor field, you can add the vendor details by selecting the add a line option available in the menu.

Using this field, you can define a vendor price list. The vendor creation form is given below.

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Reordering :

Procurement: Under the procurement field, you have two options:

1. Create a draft purchase order: Based on your product configuration, the system will create a draft purchase order.

2. Propose a call for tender: If the “purchase requisition” module is installed and this option is selected, the system will create a draft call for tender.

Vendor bills :

• Vendor taxes: default taxes used when buying products.

• Control policy: Here Odoo provides two options for you to define the bill control policy of the product. It can be assigned based on ordered quantities or received quantities. You can assign the policy which is suitable for your product.

  • 1. On ordered quantities: control bills based on ordered quantities.
  • 2. On received quantities: control bills based on received quantities.

Purchase descriptions: You can provide a purchase description on the given box. These notes will be added to the purchase orders.

Under the Inventory tab

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Operations :

1. Routes: depending on the modules installed, Routes will allow you to define the route of the product, whether it will be bought, manufactured, replenished on order, etc.

2. Customer Lead Time: Delivery lead time in days.it is the number of days promised to the customer between the confirmation of the sales order and the delivery.

Description for delivery orders: These notes will be added to delivery orders.

Description for receipts: This description will be added to receipt orders.

Adding Vendors to The Product

There are two ways to add vendors to the products. One method is to add vendors and vendors’ details manually. The second one is if you are issuing a purchase order for the first time Odoo will automatically connect the vendor and its cost to the product.

Set Multiple Vendors On A Product

In the Odoo platform, you can experience a better vendor management facility. This platform surely helps you to manage all the operations of the vendors being listed out in it. You can also set multiple vendors to a product and service in the Odoo purchase module. There must be some situations where you need to buy a product from different vendors. Odoo provides you this feature for buying one product from different vendors. Odoo can allow you to directly link them with a single product.

To make use of this feature, Go to Purchase -> Product and then select a product.

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Give the appropriate details .product name, product information, etc.

Under the Purchase Tab, you can see the options for creating multiple vendors for this particular product.

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Here you can add existing vendors to your product or can create new vendors. Also, you can add the details of the agreement, company, quantity, price.

If you are adding a vendor to a product, you are also able to add the vendor product name, vendor product code and can allocate product variant and delivery lead time. You can describe the minimal quantity, the price to purchase a product, and the validity period.

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Products in Different Units of Measure

There are some situations where products in different units of measures are required.

One of the examples of this situation is we will buy products in bulk from suppliers and sell them in units to the customers.

Configuration

Under the Inventory module, Go to Configuration > settings > activates the option Units of the measure under the Product section. then save the changes.

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Setting up units on your products

When you activate the option units of measure you can see the options on the product creation window.

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In the unit of measure section, select the unit in which you want to sell the product and in which the internal transfers will be executed. The sale price is indicated based on the product unit of measure.

In the Purchase unit of measure section, select the unit in which you buy the item. The cost price is indicated in the Purchase units of measure.

The rounding amount will be adjusted consequently by Odoo when the inter-unit exchanges are done.

Vendor Management

In every business unit, the importance of vendor management software is unpredictable. It is the vendor management software that helps organizations to manage costs and bring down the risk factors associated with vendors. Odoo, the best suitable business management app is the perfect solution for vendor management.

Creating Vendor

For getting the feature Vendor, Go to Purchase module ->Orders -> Vendors.

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Here in this image, you can see the vendor dashboard, and using this window you can create a vendor. The created vendor details also can be viewed.

For creating New vendors, click on the create button. If you click on the create button, a creation form will appear as shown below:-

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In this form, you can see many options and fields like company name, company type.

different tabs like the contact and addresses tab, sales and purchase tab, invoicing tab, internal notes. etc.

You can configure a new vendor by adding his name, Address, Phone, and Mobile number, Email id, Website links, tags, etc.

Let us discuss this in detail.

Odoo provides you with two types of Vendors.

  • • Individual
  • • company

You can provide the company address with the details of the country name, state, city, and also ZIP code.

Under the Contact and address Tab, you can create contact. The form is given below.

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Under the Sales & purchase Tab, you have the following options.

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Under the Sales menu the user can allocate the following details:

Salesperson: The salesperson is the internal user in charge of this contact.

Delivery Method: Default delivery method used in sales orders.

Payment terms: This payment term will be used instead of the default one for sales orders and customer invoices.

Price list: This price list will be used instead of the default one, for sales to the current partner.

Under the Purchase menu:

Payment terms: These payment terms will be used instead of the default one for purchase orders and vendor bills.

Under the Fiscal Information menu

Fiscal position: The fiscal position determines the taxes or accounts used for this contact.

And also the user can allocate the Miscellaneous information like Reference, Company, Website.

Under Invoicing Tab, you can see the following options.

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Bank: It is the name of the Bank where the customer has an account.

Account number: This is the customer's account number

Under Internal Notes Tab

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Using the internal note feature, the user can conduct internal communication without disturbing others. For example, if you want to give information to a particular vendor, you can make use of this feature.

Warning on the purchase order

Odoo allows the feature warnings on the purchase order that lets its users to blocking messages or raise warnings on purchase orders based on a vendor or a product. If you have any problem with a vendor, you can raise warnings using this feature. Also if you need to block a particular product, you can give a blocking message.

Vendor Pricelists

In Odoo it is also possible to create price lists for vendors.

Configuration

Odoo users can configure the vendor pricelist in the following manner.

Go to the Purchase module > configuration > vendor price list.

You will see a window as shown below:

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This is the list of created pricelists.

For creating a new vendor pricelist, click on the Create button available in the vendor pricelist

The creation form has given below:

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• Vendor: vendor of this product.

• Vendor Product Name: This vendor’s product name will be used when printing a request for a quotation. keep empty to use the internal one.

• Vendor Product Code: This vendor’s product code will be used when printing a request for quotation. keep empty to use the internal one.

• Product variant: If you do not set a product variant, the vendor price will apply to all variants of this product.

• Delivery Lead Time: Lead time in days between the confirmation of the purchase order and the receipt of the products in your warehouse. Used by the scheduler for automatic computation of the purchase order planning.

In the Pricelist section of this menu, you can assign the following details.

• Product: Here you can mention the product name and details using the dropdown menu.

• Quantity: The quantity to purchase from this vendor to benefit from the price, expressed in the vendor product unit of measure if not any, in the default unit of measure of the product otherwise.

• Price: The price to purchase a product.

• Validity: The validity of the pricelist

Request for Quotation and Purchase Order

Creating Request for Quotation

After entering the vendor and the product associated with the vendor, the next step is to create a request for quotation (RFQ). The request for quotation is the way to send the request for desired products to your supplier. If the supplier answered your request you can either accept the offer or can refuse the offer.

Configuration

For creating a request for quotation, what you want to do is:

Go to the Purchase module and

open purchase -> orders -> request for quotation -> and click on the create button.

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When you click on the create button available in the Request for Quotation window, you will be channelized to a new window named as a request for Quotation/New.

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Let us discuss the options available in this window.

Vendor: using this drop-down menu vendor, you can select the supplier/vendor or you can create immediately by clicking on create and edit. You can find a vendor by its Name, PIN, Email, or internal reference.

Vendor Reference: vendor reference is the reference of the sale order or bid sent by the vendor. The vendor reference is generally composed of the delivery order sent by the vendor and is for the most part used to do the matching of your items while you receive them.

Purchase Agreement: The purchase agreement is a legal document that indicates different terms and conditions regarding the purchase. Both the seller and buyer should agree with the conditions. It will include the price of the product.

For enabling this option first you need to activate the option Purchase Agreement in settings.

Purchase Module > Configuration > Settings > Orders > Purchase Agreements.

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Tick the option Purchase Agreement and click on the Save button to mark the changes.

You can find two options Call for Tender and Blanket Order by clicking the field ‘Agreement Types’.

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• Call for Tender: A Call for Tender is the process by which the firm invites vendors to submit offers for the implementation of the contract or agreement.it is a very effective method to get the most suitable price or offers from different vendors.

• Blanket Order: Blanket Order is an agreement between the purchaser(you) and the vendor. It is more applicable for the purchases of large quantities from a single vendor. Ordering a large number of products is beneficial for the vendor and the purchaser needed not pay immediately. The purchaser is allowed to conduct multiple deliveries during a particular period at a low price. The purchaser is not needed to pay immediately for huge orders.

Setting Purchase Agreement Type

For creating a Purchase Agreement Type, what you do is click on the CREATE button under Purchase Agreement Type.

when you click on the CREATE button you will be navigated to a new window.

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• Agreement Type: There are two agreement types.

  • Call for Tender
  • Blanket Order.

• Agreement Selection Type :

  • • Select only one RFQ: When a purchase order is confirmed, cancel the remaining purchase order.
  • • Select Multiple RFQ: Enabling this option will allow multiple purchase orders. By confirming the purchase order, it does not cancel the remaining orders.

• Lines: This is the option under ‘ Data for new quotations ‘. here you have two choices.

  • • Use lines of agreement
  • • Do not create RFQ lines automatically.

• Quantities: Use quantities of agreement/set quantities manually.

Blanket Orders

A Blanket order is a type of purchase order which benefits both customer and supplier. Blanket Order is an agreement between the purchaser(User) and the vendor. It is more applicable for the purchases of large quantities from a single vendor. Ordering a large number of products is beneficial for the vendor and the purchaser need not to pay immediately for huge orders. The purchaser is allowed to conduct multiple deliveries during a particular period at a low price.

Configuration

Go to purchase > configuration > settings and activate the Purchase agreement feature.

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Creating a Blanket Order

In Odoo, Blanket Orders can be created by using the Purchase Agreement menu of the configuration tab of the Purchase module.

For creating a purchase agreement(blanket order), select the Blanket Order as the Agreement type.

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Using this window, you can make a New Blanket Order.

The user can add the fields like Purchase Representative, Vendor, Agreement Deadline, Ordering Date, Delivery Date, Source Document, Company, Product details, Terms, and Conditions. etc.

The user can provide the list of products issued by the agreement by selecting the Add a line option available in the product menu.

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After filling all the fields in the purchase agreement, click on the Save button.

For confirming the purchase agreement click on the Confirm button.

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After clicking the Confirm button, you can see the status getting changed from Draft to Confirmed.

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You can see the New RFQs/Orders on the top right side of the window.

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RFQ from the Blanket Order

The user can create a new quotation using the created Blanket Order.

Note: Odoo will automatically fill the quotation document with the details using a blanket order purchase agreement. The user needs only to choose the quantity and confirm the order.

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Vendors Prices on your Product

For validating the blanket order, a new vendor line is added to the product. So one can identify which all are linked to the blanket order.

Call For Tender

For enabling the feature Call for tender, you have to go to the

Purchase > configuration > settings

and activate the Purchase agreement feature.

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Creating a Call for Tender.

For creating a purchase agreement,

Go to Purchase -> Orders -> Purchase agreements.

You will get a new window like below.

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Click on the Create button available on the top left corner of this window and you will be depicted by a new window like below.

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In this creation form, you can select the Agreement Type as Call for Tender and then fill in all the fields available in the form such as Purchase Representative, Vendor, Agreement Deadline, Ordering date, Delivery date, Source document, Company, product details, terms, and conditions.

the next step is to click on the Confirm button available on the top left corner of this purchase agreement window. Then you will get a new window as shown below.

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You can create RFQs by clicking on the New Quotation button and can either send RFQ via email or can print RFQ.

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Upon clicking the Send by Email option, an automated email will be readied concerning the predefined layout. If you send the mail RFQs status will be changed from RFQ to RFQ send.

Purchase Order

Creating Purchase Order

After receiving the reply and offer from the supplier, update the RFQ by clicking on Edit to match the quotation. Then click on the save button for issuing a Purchase Order.

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Click the Confirm Order button to send the order to the supplier.

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Receive the Product

After completing all these steps and if you are confirmed the purchase order, the next step is to receive the product. You can see the button named Receive products in the purchase agreement window.

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Upon clicking the Receive Products button, you will be redirected to the new window like below:

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In this window, you can see all your information about the purchase order like product information, product location, receive from, operation type, scheduled date, Source Document.

Under the Additional Information Tab, you can see the shipping information and Other details. Under the shipping information tab, you can allocate the details like tracking reference, carrier details, and the total weight of the products in the picking and also can allocate the weight for shipping option which is the weight used to compute the cost of shipping.

Under the other information tab, you can assign the responsible person and the company details, and also you can set the priority as low, medium, or high.

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Canceling Purchase Order

There may be many situations that need canceling the purchase order. The user can cancel the purchase order by clicking the Cancel button. If you click on the cancel button, the status will change as Cancelled.

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Purchase Order Approval

The Purchase Order Approval is one of the features available in the Odoo purchase module, that is suitable for expensive purchases. For every expensive purchase order, you may need the approval of the concerned authority or manager.

For enabling this feature, what you need to do is

Go to Purchase > Configuration > Settings and activate the feature Purchase Order Approval available under the Order section.

There you can set the minimum amount required to initiate this feature.

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While working with a new quotation request, if the order is not approved by the manager and the amount is above the minimum amount you defined, a new To Approve status will be displayed.

Vendor Bills

A vendor bill or invoice is the receipt containing the details of products and services bought from sellers. After registering the vendor bills in Odoo you can easily pay bills depending on your vendor policy.

For taking control over the Bills, Odoo provides the feature ‘Bill Control’.

For activating this feature Go to Purchase > Configuration > Settings.

In settings, you can see the feature Bill Control under Invoicing.

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In the feature Bill Control menu, there are two options:

• Ordered quantities: Sending bills based on Ordered quantities.

• Received quantities: Sending bills after receiving the products.

Drop-Shipping

Dropshipping is a retailing technique where the seller does not keep the product in hand stock. Instead, the seller sells the product using the dropshipping method. In the drop-shipping model, the seller does not handle the product directly. It is an order fulfillment method where the product is exchanged through the sale order to a third party supplier and he/she ships the order to the customer

For enabling the feature Drop Shipping,

Go to Purchase > Configuration > Settings and activate Drop Shipping available under the Logistics section.

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After activating the Dropshipping option, you can go on a product and tick the dropshipping route. You can also define the vendor from whom you buy the product. Each time when the item will be sold, it will be drop-shipped.

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Reporting

Odoo provides a chance to its users to analy\e their performance using graphical representations. Using the Odoo purchase reporting feature, the user can evaluate all the appropriate advancements and dealings in business operations.

For obtaining this facility, go to Purchase > reporting > purchase

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You will move to a new window.

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This is the default PIVOT view of your purchase orders. Using this report, you can get a glimpse of your performance with a few clicks. You can add additional data to your reports by clicking on the Measures icon.

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You can also display your reports in graphical representations. Odoo provides you with three smart views and they are the line chart, graph chart, and pie chart. All the purchase reports can be created and viewed in the form of graphical representations.

the LINE CHART

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GRAPH CHART

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PIE CHART

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Customize Reports

The user can customize the purchase reports depending on their needs. A search bar is available on the top right side of your window. This feature allows you to highlight only selected data on your reports.

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The Filters option allows you to show a few sections of information on your reports. The Group by option improves the readability of your reports.

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