Xero advises not to use its inventory tracking for manufacturing companies. 

In general:

Most accounting software packages track inventory as follows:

1. When a purchase order is created, the item is added to the inventory.

2. When an invoice is created, the item is subtracted from inventory.

This needs to be the same item. Usually, the average cost method is used to calculate the cost of goods sold.

What they cannot do:

MRPeasy can achieve all of the above, thus inventory tracking needs to be performed in MRPeasy.

Read more on Xero integration.

It is functionality that lets you record the detailed history of each item that is processed in your company.

How does a lot of tracking work?

Lot tracking ensures that the history of every product and material is known. Technically this means the following:

• Each batch of an item is tracked and identified separately.
• Every time a material is purchased, a unique lot number is recorded for it.
• During production, materials are consumed from specific stock lots. The stock lot numbers are recorded. 
• Each production run produces a new lot (batch) of products.
• Stock lots from where products were given out are recorded for each sale.
• Defects in products can be traced back to specific production operations or material purchases in seconds.
• For a defective batch of materials, it is possible to identify all products which are affected.

How does a lot tracking work in MRPeasy?

The warehouse management functionality (WMS) together with manufacturing planning and reporting functions (MRP-MES) in MRPeasy offer full lot and serial number traceability. This makes MRPeasy perfectly suited for ensuring material and product traceability:

• Lot tracking is automated and is always working.
• Unique lot numbers are automatically generated when products enter the system.
• Notes and files, e.g. certificates, can be attached to individual stock lots.
• Expiry dates of materials and products are managed.
• MRPeasy proposes which lots to pick items from – no manual lot number recording needed by the worker.
• MRPeasy makes sure that no product or material can be overbooked by managing the reservations properly.
• If materials or products need to be picked, the lot number, location, and quantity are always indicated to the workers.
• It is possible to divide one batch of materials (a stock lot) between different production runs, or customers.
• In addition to stock lot numbers, it is possible to track serial numbers of individual parts.
• The actual cost of each batch of products is known (from direct materials cost).

 See also What is a stock lot?