As of my last knowledge update in September 2021, Xero does not have built-in inventory tracking features like some other accounting and business management software. However, you can still manage basic inventory in Xero using workarounds and integrations. Here’s a general guideline on how to handle inventory tracking in Xero:
1. Set Up Inventory Accounts:
- In Xero, you can create accounts to represent different inventory items or categories. These accounts will help you track the value of your inventory on the balance sheet.
2. Create Inventory Items as Products/Services:
- Instead of setting up a dedicated inventory module, Xero manages inventory by treating products or services as items. To set this up:
- Go to the “Accounts” or “Accounting” section in Xero.
- Create products or services under “Products and Services” or a similar category. Assign the appropriate income and expense accounts.
3. Record Inventory Purchases:
- When you purchase inventory items, create a bill or an expense claim in Xero and associate it with the appropriate inventory accounts. This helps in tracking the cost of goods sold (COGS) and the inventory asset.
4. Record Inventory Sales:
- When you sell inventory items, create sales invoices in Xero and link them to the respective inventory items. This helps in tracking revenue and reducing the inventory asset.
5. Track Quantity Manually:
- You’ll need to manually track the quantity of inventory items on hand outside of Xero. Many businesses use spreadsheets or specialized inventory management software for this purpose.
6. Regularly Update Inventory Levels:
- Periodically update your inventory levels in Xero based on your physical counts. Adjust the quantities on hand to match your actual inventory levels.
7. Consider Third-Party Integrations:
- Xero integrates with various third-party inventory management software. You may want to explore these integrations to streamline inventory tracking and management. Some popular options include TradeGecko, Unleashed, and Dear Inventory.
8. Review Inventory Reports:
- In Xero, you can generate reports to view inventory values and track the cost of goods sold. Reports like the “Inventory Item Summary” and “Inventory Item Details” can provide insights into your inventory management.
Please note that Xero’s inventory management capabilities may have evolved or changed since my last knowledge update in September 2021. I recommend visiting Xero’s official website or contacting their support for the most up-to-date information on inventory tracking features and integrations available in the platform.
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