Common Odoo Terms Every Business Owner Should Know

Common Odoo Terms Every Business Owner Should Know

Choosing, implementing, and managing an ERP system like Odoo introduces a specialized vocabulary crucial for business decisions. This glossary of 51 common Odoo and ERP terms serves as a practical reference for business owners and decision-makers during mid-market implementations. It includes technical definitions spanning Odoo's architecture, compliance, modules, implementation processes, and operational terminology. By understanding these terms, users can navigate discussions with Odoo partners and implementation teams more effectively, enhancing the decision-making process.

The Odoo Glossary

The Odoo glossary terms can help you better understand what’s happening behind the scenes starting from the  implementation process and what it means for your business. Whether you’re considering Odoo for the first time or already working through an implementation, this glossary will help you navigate conversations with more clarity and confidence. The key terms includes;

  1. Access rights (groups): Refers to Odoo's permission model where users belong to groups that specify read/write/create/delete permissions on models. These are configured under the Settings-Users & Companies -Groups.
  2. Action (Customization): Represents automated processes within Odoo, typically server-side (Server Action) or triggered by record changes (Automated Action), enabling behavior extensions without custom module coding.
  3. API key (Odoo): This is a token created for each user inside Account Security that is used to authenticate integrations with Odoo's XML-RPC and JSON-RPC APIs.
  4. App / Module: An installable unit in Odoo, such as Sales or CRM, where each app comprises one or more Python modules; "app" and "module" are used interchangeably.
  5. BOM (Bill of Materials): A structured list of components and operations necessary for product manufacturing, accommodating various types of BOMs.
  6. Chart of Accounts (CoA): A list of accounts specific to a user's accounting system, with Odoo providing country-specific charts compliant with various regulations (IFRS, US GAAP, etc.).
  7. Community Edition: The free, open-source version of Odoo, including core apps and licensed under LGPLv3, intended for self-hosting.
  8. Cron job (Scheduled action): A background task in Odoo, like invoice generation or email follow-ups, which can be configured under Technical-Scheduled Actions.
  9. Custom module: A Python module designed for a specific customer to enhance Odoo with unique features, adhering to Odoo’s standard module framework.
  10. ECO (Engineering Change Order): It is an Odoo workflow with audit trails and approval procedures for handling changes to BOMs(Bill of Materials) and routings.
  11. Enterprise Edition: Odoo's full-featured commercial version offering an extensive app catalog and managed hosting options, with tiered pricing based on user needs.
  12. ERP (Enterprise Resource Planning): Comprehensive business management software that integrates finance, operations, HR, sales, and reporting into a single system, positioning Odoo as an open-source competitor to major ERPs like SAP and Microsoft Dynamics.
  13. FatturaPA: It is an XML structure sent via the Sistema di Interscambio (SDI) is the required electronic invoicing format for B2B and B2G transactions in Italy. Odoo supports FatturaPA generation, validation, and archival processes as part of its Italian localization.
  14. Fiscal Position and Accounting: Odoo's accounting features facilitate the mapping of standard tax rates to alternative rates depending on customer or vendor locations or status. This is particularly advantageous for handling VAT exemptions, reverse-charge VAT, and cross-border tax requirements.
  15. Role of Functional Consultants: The document underscores the role of functional consultants in Odoo implementations, differentiating them from technical consultants. These consultants engage in business process configuration, conduct discovery sessions, module configuration, and lead user acceptance testing (UAT).
  16. GoBD Compliance: References are made to Germany's GoBD regulations, which pertain to the proper management of electronic books and records. Odoo's German localization ensures compliance by maintaining adequate audit trails.
  17. GST in India: Odoo's functionality for the Goods and Services Tax (GST) in India encompasses handling GST registration, e-invoicing, e-way bills, and the generation of statutory returns.
  18. Hypercare Engagement: After the go-live phase, Odoo partners provide heightened support during the hypercare period, lasting for 30 days, which includes daily standups and dedicated consultant support.
  19. Inventory Adjustments: Odoo allows for periodic inventory adjustments to reconcile physical stock counts with system records and generates corresponding accounting entries for any variances found.
  20. Journal Accounting: Within Odoo, various types of accounting journals organize transactions, each adhering to its sequence and default accounts.
  21. User Interface Innovations: The Kanban view allows users to manage visual workflows in various domains effectively, such as sales and projects.
  22. Landed Cost Management: The document describes how Odoo handles landed costs, reflecting additional expenses related to inventory items after purchase.
  23. Licensing under LGPLv3: Odoo Community's distribution follows the Lesser General Public License version 3, promoting open-source modifications while supporting commercial use.
  24. Localization Efforts:Odoo supports over 90 official localizations, ensuring comprehensive adaptation of financial, tax, reporting, and regulatory requirements in various countries.
  25. Manufacturing Orders and MRP: A clear overview of how Odoo manages manufacturing orders and the Material Requirements Planning (MRP) processes is provided, emphasizing its capacity to optimize production and procurement based on sales and stock needs.
  26. Odoo Online Hosting: Odoo S.A. provides managed SaaS hosting that is part of the Enterprise per-user licensing charge. It enables auto-upgrades with either no customization (Standard plan) or limited customization (Custom plan via Odoo.sh).
  27. Odoo S.A.(Vendor): a Louvain-la-Neuve-based Belgian corporation, is in charge of creating and distributing Odoo, overseeing a network of partners, and publishing significant upgrades every year.
  28. Odoo.sh Hosting:Managed Git-based PaaS for Enterprise Custom clients, with features like automated backups and the ability to create custom modules for different environments (production, staging, and branches); priced according to staff and storage.
  29. The Odoo Web Library (OWL) is a front-end framework that supports custom user interface components in Odoo 16+ and is based on JavaScript and reactive design.
  30. Frontend Architecture: Finally, the OWL (Odoo Web Library) is explained as the reactive JavaScript-based framework used for the development of custom UI components in Odoo’s latest versions.
  31. Partner (Implementation): This refers to organizations certified by Odoo S.A. to sell and implement its software, categorized into three tiers: Ready, Silver, and Gold.
  32. Partner (Odoo Record): In Odoo, a "Partner" is any contact such as a customer, vendor, employee, or lead, with the ability to assume multiple roles within a single recorded entry. It's crucial to differentiate this from the term "Odoo partner," which refers specifically to implementation partners.
  33. Peppol Compliance: The Pan-European Public Procurement Online is an interoperability network supporting electronic invoicing across Europe, increasingly adopted as the standard for B2B and B2G electronic invoicing within EU countries.
  34. PLM (Product Lifecycle Management): An Odoo Enterprise module that manages engineering changes to products and Bill of Materials (BOMs), handling Engineering Change Orders (ECO), BOM versioning, and documenting revisions.
  35. PostgreSQL: This is the relational database management system that underpins Odoo, ensuring all data is stored in a single PostgreSQL instance per company. The required PostgreSQL version aligns with Odoo's major releases, for instance, Odoo 19 necessitates PostgreSQL 14 or higher.
  36. PPF (Portail Public de Facturation): It is France's public e-invoicing platform, which is crucial for the mandatory implementation of B2B e-invoicing processes. This platform set to begin from September 2026, with private dematerialization platforms connecting to PPF on behalf of businesses.
  37. Quotations and Sales Management:A quotation in Odoo represents a pre-confirmation sales record that can convert into a Sales Order upon customer confirmation, with capabilities to accommodate multiple versions and conditional products.
  38. Reordering Rule:This inventory management feature in Odoo triggers automatic replenishment when stock levels fall below specified thresholds, initiating purchase or manufacturing orders accordingly.
  39. Routing in Manufacturing: Odoo outlines the sequence of operations through work centers necessary for product production. Each Bill of Materials references a routing, resulting in work orders based on confirmed manufacturing orders.
  40. Sandbox/Staging Environment: Refers to non-production instances of Odoo used for testing configurations and customizations before moving changes into live production. Built-in staging environments are supported by Odoo.sh, while manual setups can be established in self-hosted environments.
  41. Sequence: A configuration in Odoo relating to auto-numbering documents like invoices or sales orders, which can be customized to include prefixes, suffixes, and padding options.
  42. SII (Suministro Inmediato de Información): This regulatory requirement in Spain mandates near-real-time VAT data submission for businesses above a specified turnover threshold to the AEAT tax authority.
  43. Studio (Odoo): This is a no-code customization tool available exclusively for Odoo Enterprise, allowing users to edit forms, list views, and add fields without needing to write Python code, although it has limitations compared to fully developed custom modules.
  44. TCO (Total Cost of Ownership): A financial metric that reflects the complete cost of operating an ERP system over multiple years, which includes licensing, implementation, ongoing support, hosting, and internal resources.
  45. Three-way Matching: A procedure in procurement where the purchase order, vendor bill, and goods receipt are verified against one another before approval of payment.
  46. UAT (User Acceptance Testing): A formal phase prior to going live, where the customer's team systematically tests the system to validate configurations, with signoff required to proceed to production.
  47. Validated Record: A record in Odoo that has been confirmed and posted, such as a journal entry or sales order, which generally cannot be modified afterward except to reverse or cancel, ensuring an auditable trail.
  48. VAT (Value Added Tax): An indirect tax commonly applied outside of the U.S., for which Odoo's tax engine manages calculations, rates, exemptions, and intra-EU transactions.
  49. View/Odoo UI Views: This refers to different user interface definitions such as form view, list view, and kanban view, which are defined in XML and can be extended by custom modules.
  50. Workflow/Automated Actions: Previously known as workflows, from Odoo version 11 onwards, businesses implement processes through model methods and automated actions instead of a deprecated workflow engine.
  51. ZATCA Compliance: The Zakat, Tax and Customs Authority in Saudi Arabia oversees the Fatoorah e-invoicing system. Its first phase has been operational since December 2021, with an integration phase ongoing that requires XML invoicing, QR codes, cryptographic stamps, and portal integration.

This comprehensive terminology guide is essential for understanding how Odoo facilitates various operational and compliance tasks within businesses. This detailed overview encapsulates the functionalities and compliance mandates that surround Odoo's operations across various jurisdictions, highlighting its adaptability and comprehensive approach to enterprise resource planning.