Cost estimation is a critical part of production. It helps you recognize the production costs before you begin making a product. This lets you plan your production greater correctly, quote correct fees in your clients, and avoid sudden losses. If you're using Odoo for your manufacturing operations, you can easily manage this with its Cost Estimation feature. Odoo allows you to estimate everything from raw materials to labour, machine operations, and even indirect costs like electricity or packaging, all in one place.
Why Cost Estimation Matters?
Manufacturing cost estimation helps manufacturers make better business decisions. Before starting production, you already know how much it will cost to make the product. This enables you to set the right selling price and plan your profit. It also helps avoid unnecessary expenses, choose better suppliers, and improve the overall production process. With Odoo, manufacturing cost estimation becomes faster, more accurate, and fully linked with your sales and manufacturing workflows.
Key Features of Cost Estimation in Odoo
Plan and Control Production Costs Early
Odoo Cost Estimation tool allows you to plan every part of your production cost even before manufacturing begins. This means you can forecast your budget, plan materials in advance, and avoid overspending.
Estimate Materials, Labour, Operations, and Indirect Costs
Odoo lets you add all types of costs in one estimation form, raw materials, labour time, machine use, and other indirect expenses like transport, electricity, and packaging. This gives you a complete picture of how much the product will cost to manufacture.
Works for New and Existing Products
You can use cost estimation for both new and existing products. For new products, you can build everything from scratch. For existing ones, Odoo will pull in existing BoM (Bill of Materials) details to save time.
Structured Layout for Better Clarity
All the cost details are shown in a clean and structured layout. It separates materials, operations, and indirect costs, making it easy for anyone to understand where the money is going.
Automatic Total Cost Calculation
As you enter data into each field, Odoo calculates the subtotal and total cost in real-time. You don't need a calculator or spreadsheet; Odoo handles all the math for you.
Email to Customers After Approval
When the estimation is approved, Odoo can send an email to the customer. This keeps communication fast, clear, and professional without the need for manual follow-up.
No Duplicate BoMs
If the product already has a Bill of Materials, Odoo will detect it and avoid creating a duplicate. This keeps your data clean and avoids confusion in production.
Convert Estimation to Sales Quotation or Manufacturing Order
Once the price estimation is accepted, you may without delay convert it right into a sales quotation or production order. This saves time and ensures all statistics flows easily from one process to another.
Expiry Date Handling
Every estimation can have an expiry date. Once the date is passed, Odoo automatically marks the estimation as expired. This ensures your team doesn't use outdated pricing.
Full Traceability from Estimation to Production
All actions from creation to approval and conversion into orders are tracked in Odoo. This gives you full traceability for auditing and performance tracking.
Step-by-Step Guide to Setting Up Cost Estimation in Odoo
Step 1: Install the Required Modules
To get commenced, ensure you've got the important modules. These consist of Manufacturing (MRP), Sales (optionally available but beneficial), and the Cost Estimation module. Some corporations may also use a custom module if it's not to be had by using default.
Step 2: Create a New Estimation
Go to the Cost Estimation menu on your Odoo dashboard and click on the "Create" button. Enter the product call, quantity, patron name (if applicable), estimation date, and expiry date. This units the foundation on your cost estimation.
Step 3: Add Material Costs
In the materials phase, begin adding the raw substances needed to make the product. Mention the amount and cost according to the unit for every object. Odoo will calculate the entire cost of all substances.
Step 4: Add Labour and Operations
Add the obligations or operations needed to construct the product. This can include reducing, welding, portraying, assembly, and other related responsibilities. For each operation, point out the time required and labour price consistent with the hour. Odoo will calculate the labour fee for each venture.
Step 5: Add Indirect Costs
Here, you can enter other costs, such as electricity, transport, packaging, and machine depreciation. These can be added as fixed costs or as a percentage of the total production cost.
Step 6: Review Total Production Cost
Odoo calculates the total production cost by adding up the cost of materials, operations, and indirect expenses. If you make any changes in quantity or rate, the total updates immediately.
Step 7: Submit for Approval
Once the estimation is complete, you can save it or submit it for approval. Based on user access rights, a manager or authorised user can review and approve it. After approval, an email will be sent to the customer if email notification is enabled.
Step 8: Generate Quotation or Manufacturing Order
After approval, Odoo allows you to create a sales quotation or manufacturing order with a single click. You don't have to enter the exact details again. Everything flows smoothly to the following process.
Step 9: Expiry Date Auto-Update
When the expiry date passes, Odoo marks the estimation as expired automatically. This prevents your team from using outdated or inaccurate estimations, which can lead to losses or misunderstandings.
Step 10: Keep Everything Traceable
Odoo records every action that created the estimation, who approved it, and when it was turned into a sale or production order. You can always go back and check the full history for any estimation.
Real-Life Example
Imagine you own a company that makes steel cabinets. You get a new customer inquiry and want to quote a price. Instead of guessing, you open Odoo, create a new cost estimation, add all the material costs (like steel sheets, handles, paint), labour time (cutting, bending, welding), and packaging or delivery charges. Odoo instantly shows you the total cost. You approve it, the customer gets the quotation by email, and once accepted, you start the production, all within a few clicks. That's how easy and professional it becomes.
Final Thoughts
The Cost Estimation feature in Odoo is a must-have tool for manufacturers who want to work smart, reduce manual work, and make better decisions. It helps you plan your production costs accurately, without using spreadsheets or guessing. With automatic cost calculations, email alerts, one-click order creation, and expiry tracking you save time and avoid mistakes.
This feature improves your internal workflow and also builds trust with your customers. It shows that your company is professional, organized, and serious about quality. Whether you run a small workshop or a large factory, Odoo cost estimation feature will help you manage costs better and stay in control.
You can get this powerful feature from the Odoo App Store by Devintellecs. It's designed to make your manufacturing process easier, faster, and more reliable. Try it and take full control of your production cost estimation today!
