Odoo Inventory: How to Set It Up and Use It (Odoo 19 Guide)

​What does Odoo Inventory actually do?

Odoo Inventory works on locations. Your warehouse is a location, and so are its shelves or bins if you use them. Suppliers, customers and stock losses are virtual locations. Receiving a purchase moves stock from the vendor location into your warehouse, delivering an order moves it from your warehouse to the customer location, and a stocktake adjustment moves it to or from an inventory-loss location. Because every change in quantity is a move with a source and a destination, Odoo can show where every unit came from and where it went.

On top of that, Odoo Inventory handles receipts and deliveries, internal transfers, reordering rules and the replenishment report, lot and serial number tracking, and inventory adjustments. It shares products and contacts with Sales, Purchase, Manufacturing, eCommerce, Point of Sale and Accounting, which is where most of the value comes from: one set of stock figures behind every part of the business.

​How do you set up Odoo Inventory, step by step?

The order matters. Some settings are easy to change later and some shape every transaction that follows, so we set things up in roughly this sequence.

Step 1. Turn on the features you need

Go to Inventory > Configuration > Settings. A simple single-site business can start with very little switched on. The settings most businesses end up needing are Storage Locations (shelves and bins, and required for cycle counts), Multi-Step Routes (two- or three-step receipts and deliveries), Lots & Serial Numbers (traceability and expiry) and Units of Measure & Packagings (for example, buying in cartons and selling in units). Turn on what your process needs now. You can add more later.

Step 2. Set up your warehouse and locations

Each warehouse has a short code that prefixes its transfers, so pick something your team will recognise. With Multi-Step Routes switched on, the warehouse form lets you choose how incoming and outgoing shipments are processed: in one step (straight into or out of stock), in two steps or in three. Incoming and outgoing shipments do not have to use the same number of steps. Most small and mid-sized businesses start with one step and add a quality-check or pick-and-pack step only where it solves a real problem.

If you use Storage Locations, create sublocations for the areas you actually pick from, such as aisles, shelves or bins. More locations means more scanning and more places for stock to be recorded in the wrong spot, so match the structure to how your team physically works.

Step 3. Decide how stock is valued before you load any

This is the step that matters most to your accountant, and the hardest to unwind later. In Odoo 19, the costing method (Standard, Average Cost or FIFO) and the choice between periodic and perpetual valuation are set in the Accounting settings, and a product category can use a different costing method where needed. Periodic valuation updates the stock value through a closing entry. Perpetual valuation carries stock as an asset and recognises cost of goods sold as goods are sold.

Set this with whoever does your accounts, and agree which stock and cost of goods sold accounts your product categories will use. The section on how stock and the accounts stay in step in our inventory cost guide explains the options in more detail, including why LIFO is not available.

Step 4. Create your products properly

In Odoo 19, a physical product is a Goods product with Track Inventory ticked. Tracking can be by quantity, by lots or by unique serial numbers. Leave Track Inventory unticked only for items you never need to count, such as office supplies or some packaging. Untracked goods have no on-hand quantity and cannot use reordering rules.

For each tracked product, check the unit of measure (plus a purchase unit of measure if you buy in cartons or pallets, which must be in the same unit category), the barcode, the product category, the vendor and their lead time on the Purchase tab, and the replenishment route (Buy or Manufacture) on the Inventory tab. Everything else depends on clean product data, so it is worth importing it from a reviewed spreadsheet rather than typing it in as you go.

Step 5. Load your opening stock

Opening quantities go in through Inventory > Operations > Physical Inventory. Enter the counted quantity for each product and location (and the lot or serial number, if the product is tracked that way), then apply the counts. The value of that opening stock flows into your inventory valuation, so the quantities and unit costs need to agree with the stock figure in your opening balances.

Do the count close to go-live, load it the same day, and reconcile the resulting stock value against the balance you are bringing across from your previous system before anyone starts receiving or shipping.

Step 6. Set reordering rules

Reordering rules keep forecasted stock between a minimum and a maximum. When a product falls below its minimum, Odoo creates a request for quotation for products on the Buy route, or a manufacturing order for products on the Manufacture route, sized to bring stock back up to the maximum. Rules can run automatically or manually. Manual rules feed the Replenishment report (Inventory > Operations > Replenishment), where a buyer reviews the suggested quantities and places the order.

Start with your fast movers and the items that hurt most when they run out, and set minimums from real sales history and supplier lead times rather than guesswork.

​What does day-to-day work look like in Odoo Inventory?

Once the setup is in place, most of the daily work happens on transfers that other apps create for you.

1. Receiving. Confirming a purchase order creates a receipt. When the goods arrive, the receiver checks the quantities (and lots or serial numbers) and validates it. If part of the order is short, Odoo can keep the rest open as a backorder.
   
   
2. Picking and delivering. Confirming a sales order creates a delivery. Odoo reserves available stock against it, the team picks and validates it, and partial shipments can be split into backorders in the same way.
   
   
3. Internal transfers. Moving stock between locations or warehouses is its own transfer, so the records always show where stock is.
   
   
4. Scrap and returns. Damaged stock is scrapped to a scrap location, and returns are created from the original delivery or receipt, so the history stays linked.
   
   
5. Counting. Instead of one big annual stocktake, you can count by location on a regular schedule (cycle counts, which need Storage Locations) and apply the differences on the Physical Inventory page.
   
   

With Odoo's Barcode app, most of these steps can be done by scanning with a USB or Bluetooth scanner or a mobile computer instead of typing, which cuts down keying errors on the warehouse floor.

​Which Odoo Inventory reports should you check?

Three reports cover most needs. The Stock report (Inventory > Reporting > Stock) shows on-hand and forecasted quantities by product. Moves History (Inventory > Reporting > Moves History) lists every completed move, which is where you go to answer the question of where that stock went. And each product's Forecasted report shows incoming and outgoing quantities over time, which is the quickest way to see whether a reorder will arrive in time.

For valuation, reconcile the inventory value in Odoo with the stock account on your balance sheet at each month end. If the two drift apart, check your product categories and costing settings before looking for a problem in the warehouse.

​Which Odoo Inventory settings are hard to change later?

Most warehouse settings, such as the number of receipt and delivery steps, can be changed later. These are the decisions worth getting right first.

1. Costing method and valuation. Changing them after stock has moved affects the value of stock you already hold, so decide with your accountant before go-live.
   
   
2. Units of measure. A product's unit of measure sits behind every past move and order line, so choosing the wrong unit, or the wrong unit category, is painful to correct later.
   
   
3. Tracking. Switching a product to lots or serial numbers after it already has stock means assigning numbers to the stock on hand. Decide which products need traceability up front.
   
   
4. Product data. Duplicates, inconsistent names and missing barcodes multiply as soon as orders start flowing.
   
   

​When should you get help setting up Odoo Inventory?

A single warehouse with straightforward buying and selling can be set up by a confident internal team working from Odoo's documentation. Help pays off when stock value matters to your financial reporting, when you run more than one warehouse or use a 3PL, when you need lots, serial numbers or expiry dates, or when inventory has to work alongside manufacturing, eCommerce or point of sale.

That is the work we do every day. WAO Group is an accounting-led Odoo partner that implements the full suite: we set up Inventory, Purchase, Sales and Manufacturing so the warehouse runs smoothly and the stock value on your balance sheet is right from day one. See how this works for wholesale and distribution businesses and manufacturers, or how we connect Odoo to third-party logistics providers. If you are weighing Odoo against a dedicated warehouse system, our guide to warehouse management software in Australia covers when Odoo is enough. For a fixed-price plan before you commit, start with the Odoo Success Blueprint.

​Frequently asked questions

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