Xero

Xero is powerful online accounting software that has localizations for many countries. MRPeasy focuses on manufacturing resource planning, reporting, inventory management, sales, and procurement. MRPeasy together with Xero accounting creates a very powerful ERP system. We strongly recommend performing all business operations in MRPeasy, and in Xero the accounting only.

It is possible to make a basic or an in-depth integration.

Basic integration:

  • Easy to set up.
  • Only sales and purchasing documents can be duplicated to Xero: Invoices, Credit Invoices, Prepayment invoices, Purchase Orders, Purchase Invoices.

In-depth integration:

  • Requires expert accounting knowledge to complete.
  • Additionally, all inventory and manufacturing transactions of each day are posted to Xero with a manual journal entry.
  • These journals include balance changes in inventory accounts, Work in progress (WIP), Cost of Goods Sold (COGS), etc.

Jump to:

  1. Demo video: Xero integration
  2. Setting up the integration with Xero.
  3. How does the integration work between MRPeasy and Xero?
  4. When are synchronizations performed?
  5. How does inventory tracking work in MRPeasy?
  6. Troubleshooting, synchronization logs.

Setup of the integration between MRPeasy and Xero

Jump to:

  1. Notes about using Xero tracked inventory.
  2. Connect MRPeasy and Xero.
  3. Select what to synchronize
  4. Synchronization of payments.
  5. Choose how Purchase Orders / Purchase Invoices are synchronized.
  6. Select accounts for the integration.
  7. Custom accounts for products.
  8. Check products' Purchase accounts in Xero.
  9. Get balances in MRPeasy and Xero in sync.
  10. Import customers, vendors, and items from Xero.
  11. Review, change or disconnect the integration.
Xero Tracked Inventory

Inventory (stock) tracking should not be used in Xero for items that are managed in MRPeasy. Xero makes some automatic inventory transactions for these items, e.g. when they are bought or sold, which MRPeasy does not control.

MRPeasy itself posts changes in inventory balances to accounts during nightly synchronizations.

Technical reasons why MRPeasy does not integrate with Xero Tracked Inventory are the following:

  1. At present Xero does not support the importing of inventory values for items via API.
  2. Xero advises not to use its' inventory tracking for manufacturing companies (https://central.xero.com/s/article/Track-your-inventory), or when using a 3rd party inventory application (https://central.xero.com/s/article/Options-for-managing-inventory-in-Xero)

Connect MRPeasy and Xero

Step 0. Stop all activity

You should cease all activity in MRPeasy and Xero during the process of setting things up.

Step 1. Connect MRPeasy and Xero
  1. Log in to MRPeasy.
  2. Navigate to Settings -> System settings -> Integrations.
  3. Click on Connect to Xero to connect MRPeasy and Xero.
Step 2. Choose what to synchronize

It is possible to choose the synchronization of the following:

  1. Sales - If selected, sales documents (Invoices, Credit Invoices, Prepayment invoices) are sent to Xero automatically. If not selected, these can be sent manually only.
  2. Procurement - If selected, procurement documents (Purchase Orders or Purchase Invoices) are sent to Xero automatically. If not selected, POs can be sent manually only.
  3. Balances - If selected, the financial transactions that are recorded in MRPeasy are automatically posted to Xero with journal entries. If not selected, the posting of balances with journals is completely disabled.

Important notes:

  • Manual journals, which have been posted to Xero are shown in detail at MRPeasy -> Settings -> System settings -> Integrations -> Xero -> Synchronization logs.
  • Advisor access for the Xero account manager is required, otherwise, it is not possible to see the journals in Xero that MRPeasy has posted.
  • MRPeasy is a perpetual inventory system, if the periodic inventory system is used in your accounting (in Xero), then synchronization of balances should be disabled.
  • Especially, if you use Xero tracked inventory, syncing of balances should not be used.

Synchronization of payments:

  • If balances are synchronized, payments are synchronized two-way.
  • Payments for bills are synchronized only if balances are synchronized and purchase orders are posted to Xero as bills.
  • For sales invoices, if balances are not synchronized, if payment is saved in MRPeasy, it can be synchronized to Xero by pressing the Update in Xero button in MRPeasy invoice, if the Xero invoice is a draft.
Step 3. Choose how Purchase Orders are sent to Xero

Purchase Orders from MRPeasy can be posted to Xero as:

  1. Purchase Orders in Xero, or
    - If the "Several invoices per PO" setting is enabled, then POs are not posted to Xero. Purchase Invoices are posted as Bills.
  2. Bills in Xero.
Step 4. Select accounts.
  1. A default Purchases (Current Asset) account.
    - This is the product's Purchases account on the Xero Bill.
    - This account is used by MRPeasy when creating new items in Xero.
    - If balances are synchronized, this account holds the value of billed, but not received goods. The PO receipt transaction (credit) is posted with a journal on this account. 
  2. A default Sales (Revenue) account.
    - This is the Sales account on the Xero Invoice.
    - This account is used by MRPeasy when creating new items in Xero.
  3. A Bank (Bank) account.
    - An account to where payments are saved if entered in MRPeasy.
  4. Optionally, a Customer Prepayments (Liability) account.
    - It is used when a prepayment invoice is paid by a customer.

If balances are not synchronized, skip to selecting custom accounts for your products.

If synchronization of balances is enabled, additionally select:
  1. Default Finished goods (Current asset) and Materials on hand (Current asset) inventory accounts.
    - By default, all items with a BOM are considered finished goods; items without a BOM are considered materials.
    - Do NOT choose an account type of 'INVENTORY'.
  2. A Work in progress (Current asset) account.
    - An account for holding the value of currently unfinished goods, open manufacturing orders.
  3. A Direct labor (Current liability) account.
    - An account for posting direct labor costs, which are applied to product's cost (to work in progress) according to time worked on a job.
    - If the allocation of direct labor is not desired, then users’ hourly labor rates must be defined as 0 in MRPeasy.
  4. An Applied manufacturing overhead (Current liability) account.
    - An account for posting manufacturing overhead costs, which are applied to the product's cost (to work in progress).
    - If the allocation of manufacturing overhead is not desired, then workstations’ hourly rates, and fixed, and variable costs in routings must be defined as 0 in MRPeasy.
  5. A Transfer orders liability (Current liability) account.
    - If you have several sites between which you move items, then transfer fees, which are applied to inventory, are posted on this account.
  6. A default Cost of goods sold (Expense) account.
  7. Inventory Adjustments (Expense/Revenue) accounts.
Step 5. Select custom accounts for products

Optionally, in the "Custom accounts" section on the integration configuration page, you can define custom accounts per product group:

  1. A Purchases (Current asset) account.
    - This is the product's Purchases account on the Xero Bill.
    - This account is used by MRPeasy when creating new items in Xero.
    - If balances are synchronized, this account holds the value of billed, but not received goods. The PO receipt transaction's credit is posted with a journal on this account.
  2. A Sales (Revenue) account.
    - This is the product's Sales account on the Xero Invoice.
    - This account is used by MRPeasy when creating new items in Xero. 
  3. An Inventory (Current asset) account.
    - Do NOT choose an account type of 'INVENTORY'.
    - Used only if balances are synchronized.
  4. A Cost of Goods Sold (Expense) account.
    - Used only if balances are synchronized.

If balances are not synchronized, save the mapping of accounts, and the integration is set up! Continue to getting MRPeasy and Xero in sync.

If balances are synchronized, continue to the next step.

Step 6. Check products' Purchases accounts in Xero

If balances are synchronized, for all existing products in Xero, you must verify that the Purchases account matches the integration configuration.

  1. Go to Xero -> Products and services.
  2. Open a product.
  3. Check that the "Purchases" account in Xero product details matches the "Purchases" account defined in the integration configuration.
  4. Repeat for all items.
  5. Once done, save the integration configuration.

After the mapping of accounts is saved, the integration is set up! Continue to getting MRPeasy and Xero in sync.

Getting MRPeasy and Xero in sync

When the integration is first established, it is important that data in both of the systems match.

First synchronization

The first time, when the connection between MRPeasy and Xero is established:

  1. The earlier input POs and Invoices are posted only after you open and save them. If you do not make changes to old documents, they are not posted to Xero.
    - If you already have some invoices, POs, or bills in Xero, you should not send these from MRPeasy to Xero again. You will risk having duplicates in Xero.
  2. The changes in account balances from that day are posted to Xero during the next nightly synchronization.
Get starting account balances in sync

If you are synchronizing balances, you must take great care that the beginning balances in MRPeasy and Xero match.

This is easiest if there are no in-progress Manufacturing Orders, and no invoiced-and-not-received Purchase Orders in MRPeasy.

Generally, the following steps should be taken:

  1. Establish the right balances for all of your accounts.
  2. Make sure that the inventory counts and balances are correct in MRPeasy, and the balances match with Xero.
  3. Send data from MRPeasy to Xero:
    - Post any changes of balances during this day with a journal entry by clicking "Synchronize now" in Settings -> System settings -> Integrations -> Xero. 
    - Optionally, sales invoices by opening them and sending them to Xero.
    - Optionally, purchase invoices by opening them and sending them to Xero.
  4. Check if the balances match in MRPeasy and Xero. 
    - You may need to adjust the manual journal, which was just created.

If you have in-progress Manufacturing Orders in MRPeasy, consider the following:

  • If MO was started:
    - Before the day of initializing the integration, the integration's WIP account in Xero should reflect the value of consumed materials from previous days.
    - On the day of initializing the integration, its transactions are posted with the first synchronization. No manual action necessary.
  • Alternatively:
    a) You may want to finish all in-progress Manufacturing Orders, before initializing the integration. 
    b) If there is still in-progress manufacturing, you could also:
    - Manually create a stock lot for the finished goods in MRPeasy. Do not create a MO in MRPeasy.
    - Or, re-create the situation in MRPeasy and Xero as if the manufacturing had not started. Start the MO only after step (5) above.

If there are invoiced and not received Purchase Orders in MRPeasy:

Import stock items, customers, and vendors from Xero

It is possible to import stock items, customers, and vendors from directly Xero to MRPeasy at MRPeasy -> Settings -> System settings -> Integrations -> Xero.

Update or disconnect the integration

Should you wish to review the chosen settings for the integration, or make any changes to the integration, you can do this at Settings -> System settings -> Integrations -> Xero -> Change accounts.

Please note that when you change accounts, then the next transactions are posted to the new accounts. No changes are made to any historical data already posted to Xero.

The integration can be disconnected at Settings -> System settings -> Integrations -> Xero -> Disconnect.

How the integration between MRPeasy and Xero works

Jump to:

  1. Sending Purchase Order, Bills, and Invoices to Xero.
  2. Creating new items, customers, and vendors in Xero.
  3. Synchronization of tax.
  4. Events and transactions.
  5. Synchronization of payments.
  6. Synchronization schedule.
  7. Additional currencies.
  8. Inventory tracking principles in MRPeasy.
  9. How to reconcile direct labor, applied overhead, and transfer expense liabilities?

Sending Purchase Orders / Bills and Invoices to Xero

Creating new items, customers, and vendors in Xero
  • Stock items are matched by Item Code in Xero and Part Number in MRPeasy.
  • Customers and Vendors are matched according to the Name.
  • When posting invoices, purchase orders, or bills to Xero, MRPeasy will create stock items, customers, and vendors in Xero, if they do not exist.
  • According to the integration configuration, a Purchases and Sales account will be configured for the newly created item in Xero.
  • If a part number is longer than 30 characters, then the item is not transferred to Xero as a product. The part number is combined with the description into the description field.
Sending Purchase Orders or Bills to Xero

During integration setup, you must choose if Purchase Orders in MRPeasy are posted to Xero as Bills or Purchase orders.

Once the Invoice ID has been entered on Purchase Orders or Purchase Invoices in MRPeasy, then these will be synchronized to Xero as drafts.

If a payment has been saved in MRPeasy, the document in Xero will automatically become approved.

After a Bill / Purchase order has been approved in Xero, it is not possible to update it via the integration from MRPeasy any longer.

Posting additional fees on an MRPeasy Purchase Order to Xero

If the Additional fees field is used on a Purchase Order in MRPeasy, then this is posted as a line item to Xero.

If balances are synchronized, this must be posted to the integration default account (Purchases). The additional fees are expenses that are added to inventory valuation.

If some additional fees should be posted to an expense account immediately, and these are not part of inventory valuation, then for these, non-inventory items in MRPeasy can be used.

Sending Invoices to Xero

Once an invoice type is marked Invoice or Credit invoice:

  • and status is Unpaid, it is synced to Xero as a draft invoice. It must be approved in Xero.
  • and status is Paid or Paid partially, it is synced to Xero as an approved invoice. It must have a Due date saved in MRPeasy to post it to Xero.

After an Invoice is approved in Xero, it is not possible to update it via the integration from MRPeasy any longer.

Prepayments

Prepayment invoices are posted to Xero as direct payments with Transaction: Receive Money. Though Xero has the option to create prepayments, it is not possible to update prepayments via API after a prepayment is created. Because of that limitation, the integration with Xero does not use that type of document.

To post a prepayment to Xero, the following conditions must be met:

  • The invoice with the type Prepayment invoice must be fully paid.
  • Debit and credit accounts for prepayments must be selected at Settings -> System settings -> Integrations -> Xero -> Change accounts.

MRPeasy posts prepayments to Xero as follows:

  1. When posting a prepayment invoice, a bank transaction is created in Xero. The Customer prepayments account is selected on every line.
  2. When posting a final invoice, the Prepayment line is added to the invoice with a negative value.

You can find the posted prepayments in Xero, at Accounting -> Bank accounts -> Open your bank account -> Account transactions.

Tax rates

The synchronization of tax rates works as follows:

  1. MRPeasy operates with tax percentages only, there are no 'named' tax rates.
  2. When a document with tax is sent to Xero, the tax rate in Xero with the same percentage is automatically chosen. If there are several tax rates with the same percentage, then the correct tax rate must be chosen in Xero.
  3. If you need a 'No tax' invoice, please leave the tax percentage field empty in MRPeasy.
  4. If you need a 0% tax, please enter tax as '0%' in MRPeasy.
  5. Unfortunately, MRPeasy cannot post 'Tax included' invoices. If this is important, please update these invoices in Xero.

Events and transactions

The following tables describe all events and transactions, which are synchronized.

Jump to:

  1. MRPeasy -> Xero, synchronization of documents.
  2. MRPeasy -> Xero, synchronization of balances with journal entries.
  3. Xero -> MRPeasy.
 MRPeasy -> Xero, synchronization of documents:
# MRPeasy document MRPeasy event Xero event Xero Debit account Xero Credit account
Purchasing
1.1 Purchase Order Purchase Order is created. No event.    
1.2 Purchase Order / Purchase Invoice The 'Invoice ID' is saved. If MRPeasy PO is posted as PO, PO is created*. No transaction.
If MRPeasy PO / PI is posted as a Bill, Bill is created*. 'Purchases' Xero controlled (eg, Accounts Payable)
1.3 Purchase Order / Purchase Invoice PO is updated. If MRPeasy PO is posted as PO, PO is updated*. No transaction.
PO / PI is updated. If MRPeasy PO / PI is posted as a Bill, Bill is updated*, if Xero accepts the update. 
Approved documents cannot be updated by MRPeasy.
 
1.4 Purchase Order / Purchase Invoice  Payment is saved. If MRPeasy PO / PI is posted as a Bill, payment is saved for the Bill**.
(Payment is created according to the difference in the sum of saved payments in MRPeasy and Xero.)
Xero controlled (eg, Accounts Payable) 'Bank'
1.5 Purchase Order / Purchase Invoice  Payment is deleted. No event, payment must be deleted manually.    
1.6  Purchase Order / Purchase Invoice  PO / PI is deleted.  PO / Bill is not deleted, it must be deleted manually.    
Sales invoice
2.1 Invoice Invoice status is changed from 'Dummy' to 'Unpaid'. Invoice is created*. Xero controlled (eg, Accounts Receivable) 'Sales'
2.2 Invoice Invoice is updated. Invoice is updated*, if Xero accepts the update. Approved documents cannot be updated by MRPeasy.  
2.3 Invoice Payment is saved. Payment is saved for Invoice**. (Payment is created according to the difference in the sum of saved payments in MRPeasy and Xero.) 'Bank' Xero controlled (eg, Accounts Receivable)
2.4 Invoice Payment is deleted. No event, payment must be deleted manually.    
2.5 Invoice Invoice is deleted. No event, invoice must be deleted manually.    
3.1 Credit-invoice Credit-invoice status is changed from 'Dummy' to 'Unpaid'. Credit Note is created*. Xero controlled (eg, Accounts Receivable) 'Sales'
3.2 Credit-invoice Credit-invoice is updated. Credit Note is updated*, if Xero accepts the update. Approved documents cannot be updated by MRPeasy.  
3.3 Credit-invoice Payment is saved. Payment is saved for Credit Note** (Payment is created according to the difference in the sum of saved payments in MRPeasy and Xero.) 'Bank' Xero controlled (eg, Accounts Receivable)
3.4 Credit-invoice Payment is deleted. No event, payment must be deleted manually.    
3.5 Credit-invoice Credit-invoice is deleted. No event, credit-invoice must be deleted manually.    
4.1 Prepayment invoice Invoice status is changed from 'Dummy' to 'Unpaid'. No event.    
4.2 Prepayment invoice Payment is saved. Direct Payment is created*. 'Bank' 'Customer Prepayments'
4.3 Prepayment invoice Payment is deleted. No event, Direct Payment must be deleted manually.    
4.4 Invoice Prepayment is applied to an invoice. A line "Prepayment" with the negative prepayment amount is added to the invoice*. 'Customer Prepayments' 'Sales'
4.5 Credit-invoice Prepayment is applied to a credit-invoice, for a refund. Two lines are added to the Credit Note in order to debit the 'Customer prepayments' account and credit the 'Accounts Receivable' account:
- "Prepayment" with a positive prepayment amount.
- "Customer prepayment refund" with a negative prepayment amount (to 'Sales').
'Customer Prepayments' Xero controlled (eg, Accounts Receivable)
4.6 Credit-invoice Payment is saved. Payment is saved for Credit Note** (Payment is created according to the difference in the sum of saved payments in MRPeasy and Xero.) Xero controlled (eg, Accounts Receivable) 'Bank'

 

 MRPeasy -> Xero, synchronization of balances with journal entries:
# MRPeasy document MRPeasy event Xero event Xero Debit account Xero Credit account
Purchasing
5.1 Purchase Order / Purchase Invoice PO is received. Journal is made***.
(Exceptions: 6.3, 7.2)
'Materials on Hand' 'Purchases'
Purchasing - additional transactions of Subcontracting Purchase Orders
6.1 Shipment (for a Purchase Order.) Shipment is created for shipping parts to the vendor No event.    
6.2 Shipment  Goods are picked from stock. Journal is made***. 'Work in Progress' 'Materials on Hand'
6.3 Purchase Order PO is received. Journal is made***. (This is an exception to 5.1) 'Finished Goods' 'Work in Progress'
'Purchases'
7.1 Purchase Order (for an operation in a MO.) "Shipment date" is saved. Journal is made***. 'Work in Progress' 'Purchases'
7.2 Purchase Order PO is received. No event. (This is an exception to 5.1)    
Manufacturing
8.1 Manufacturing Order Manufacturing Order is created No event.    
8.2 Manufacturing Order Parts are consumed. Journal is made***. 'Work in Progress' 'Materials on Hand'
 
8.3 Manufacturing Order  Operations are started. 1. Journal is made with full planned manufacturing overhead cost***. 'Work in Progress' 'Applied manufacturing overhead'
2. Journal is made with full planned labor cost***. 'Work in Progress' 'Payroll/Direct labor'
8.4 Manufacturing Order Manufacturing Order is finished. 1. Journal is made***. 'Finished Goods' 'Work in Progress'
      2. Journal is made to adjust manufacturing overhead and labor cost***.  
Sales
9.1 Shipment (for a Customer Order.) Shipment is created. No event.    
9.2 Shipment Goods are picked from stock. Journal is made***. 'Cost of Goods Sold' 'Finished Goods'
RMA (Return Merchandise Authorization)
10 RMA order RMA order is created and received. No event.    
10.1 Stock lot The received item is returned into general stock (status of the stock lot is changed from 'RMA returned' to 'Received', the cost is manually assigned). Journal is made***. 'Materials on Hand' / 'Finished Goods' 'Inventory gain'
10.1 Manufacturing Order RMA service order is created. No event.    
10.2 Manufacturing Order Parts are consumed. Journal is made***. 'Work In Progress' 'Materials On Hand'
10.3 Manufacturing Order Operations are started. 1. Journal is made with full planned manufacturing overhead cost***. 'Work in Progress' 'Applied manufacturing overhead'
2. Journal is made with full planned labor cost***. 'Work in Progress' 'Payroll/Direct labor'
10.4 Manufacturing Order Order is finished. 1. Journal is made***. 'Cost of Goods Sold' 'Work in Progress'
2. Journal is made to adjust manufacturing overhead and labor cost***.  
Other inventory transactions
11 Manual stock lot A manual stock lot is created in MRPeasy during the stock-taking. Journal is made***. 'Materials on Hand' / 'Finished Goods' 'Inventory gain'
12 Write-off A manual write-off is created in MRPeasy during the stock-taking. Journal is made***. 'Inventory loss' 'Materials on Hand' / 'Finished Goods'
13 Transfer Order Transport fees are applied to a Transfer Order, and Transfer Order is received. Journal is made***. 'Materials on Hand' / 'Finished Goods' 'Transfer orders liability'
Other transactions
14 Purchase Order, Purchase Invoice, Manufacturing Order, Manual stock lot, Write-off, Transfer Order, Shipment Document is changed and inventory cost or balances change. If the original transaction, that is adjusted, is less than 3 months old, a journal is made with net adjustment***.

If transactions older than 3 months are adjusted, then this adjustment will not be posted to Xero automatically.

Adjustments for past periods can be restricted by setting the "Books closing date" in the MRPeasy Standard Accounting module.
According to the transactions, which are updated.

 

 Xero -> MRPeasy:
# Xero document Xero event MRPeasy event
Payments
15 Bill, Invoice, Credit-Invoice Payment is saved. If balances are synchronized, payment is saved for corresponding Purchase Order / Purchase Invoice, or Invoice.**
(Payment is created according to the difference in the sum of saved payments in MRPeasy and Xero.)

See also: synchronization of payments.
16 Bill, Invoice, Credit-Invoice Payment is deleted. No event, payment must be deleted manually.

 

Synchronization schedule:

  • *) New invoices and purchase orders are sent to Xero once per 5 minutes. Alternatively, it is possible to send a particular document to Xero immediately by clicking the button Add to Xero on the document's details page.
  • **) The synchronization of payments happens in the following cases:
    a. When a new invoice or a purchase order is sent to Xero from MRPeasy*. 
    b. When an invoice or a purchase order is opened in MRPeasy and button Update in Xero is pressed.
    c. During nightly synchronizations of balances***.
  • ***) Balances are synchronized once per day, during the evening (usually between 9 p.m. and 11 p.m.).
    This synchronization can be run manually by clicking button Synchronize at Settings -> System settings -> Integration -> Xero. The manual synchronization can be performed once per 5 minutes.
    Actions that happen during this synchronization are:
    1. Synchronization of balances, by making a journal in Xero.
    2. Synchronization of payment information between the systems.

Additional currencies

If several currencies are used, in order to send invoices, POs, or bills to Xero, standard 3-character currency codes (USD, GBP, EUR, etc. according to ISO 4217) should be used for

Inventory tracking in MRPeasy

In MRPeasy, the principles of inventory tracking are the following:
  1. All items in inventory are tracked using stock lot tracking within MRPeasy. I.e. each batch of physical items is accounted for separately.
  2. By default, MRPeasy uses FIFO (FEFO, when Expiry dates are used) principle when booking goods for consuming or shipping goods from inventory. 
    It is possible to manually manage and override the bookings and consumption of inventory, e.g. for actual costing and/or for very detailed tracking and traceability.
  3. Financial transactions are automatically made when specific events happen with the inventory.
    This means that MRPeasy is a "Perpetual inventory system", not a "Periodic inventory system". If you use the periodical method for inventory valuation (and Cost of Goods Sold calculation) (in Xero), then synchronization of balances from MRPeasy to Xero should be disabled.

Reconciling accounts

How to reconcile a Direct labor account?

Direct labor cost is part of the cost of goods sold (Expense), and it is pre-applied to products before a pay run is made. This allows to estimate the real cost of products. This also means that the pre-applied portion of labor costs must be reconciled with actual labor costs, to account for any difference between estimated and actual expenses.

Generic example, periodic reconciliation of posted direct labor:

  1. A pay run is made.
    For example, resulting account transactions might be the following:
    D Wages and Salaries (Expense)
    C Payroll (Current liability)
    D Payroll (Current liability)
    C Bank (Current assets)

  2. A manual journal entry is made to zero out direct labor liability for that period:
    D Direct labor account (Current liability)
    C Wages expense (Expense) / or COGS / or similar

Always consult your local accounting specialists, to make sure you follow local laws and regulations.

How to reconcile the Manufacturing overhead account?

Applied manufacturing overhead is part of the cost of goods sold (Expense), and it is pre-applied to products before bills have actually been received. This allows to estimate the real cost of products. But this also means that the pre-applied portion of manufacturing overhead must be reconciled with actual expenses, to account for any difference between estimated and actual expenses.

Generic example, periodic reconciliation of applied manufacturing overhead:

  1. Bills are entered on expense accounts as normal.
    For example, resulting account transactions might be the following:
    D Expense account(s), e.g. COGS
    C Accounts payable (Current liability)
    D Accounts payable (Current liability)
    C Bank (Current assets)

  2. At the end of the accounting period, a manual journal entry is made to zero the applied manufacturing overhead account for that period:
    D Applied manufacturing overhead (Current liability)
    C Expenses account(s) / or COGS / or similar.

Always consult your local accounting specialists, to make sure you follow local laws and regulations.

How to reconcile the Transfer Orders Liability account?

Transfer orders cost is part of the cost of goods sold (Expense), and it is pre-applied to products before bills have actually been received. This allows to estimate the real cost of products. But this also means that the pre-applied portion of expenses must be reconciled with actual expenses, to account for any difference between estimated and actual expenses

Generic example, periodic reconciliation of posted transfer orders liability:

  1. Transportation expenses are entered as normal.
    For example, resulting account transactions might be the following:
    D Transportation (Expenses)
    C Accounts payable (Current liability)
    D Accounts payable (Current liability)
    C Bank (Current assets)

  2. At the end of the accounting period, a manual journal entry is made to zero the Transfer Orders Liability account for that period:
    D Transfer Orders Liability (Current liability)
    C Expenses account(s) / or COGS / or similar.

Always consult your local accounting specialists, to make sure you follow local laws and regulations.

Troubleshooting

Issues:

  • I don't understand why some manual journal entries have been posted to Xero, or how these are calculated.
    - To see detailed information about all manual journal that have been sent to Xero, please go to Settings -> System settings -> Integrations -> Xero -> Synchronization logs.
    - Please check the list of events and transactions to understand when certain transactions are recorded.
  • An invoice is not posted to Xero: 
    To quickly find the reason, please click the Add to Xero button, after which you should see a relevant error message.
    There may be several reasons:
    a) Invoices are posted once per 5 minutes. To synchronize immediately, click Add to Xero in the Invoice details page.
    b) MRPeasy only posts invoices in statuses 'Unpaid', 'Paid partially' or 'Paid'; and types 'Invoice' or 'Credit invoice'. Invoices in other statuses or types are not posted. Please check the status and type of the invoice.
    c) The invoice does not have a "Due date".
    d) The invoice was created before the integration was initialized. Please open and save it.
  • An invoice cannot be updated. Error message "Invoice not of valid status for modification"
    - MRPeasy cannot update invoices, which have status "Void", "Deleted", or "Paid" (even partially). Xero does not allow MRPeasy to update these.
    - If it has the status "Paid", please update it manually in Xero.
    - "Void" and "Deleted" invoices are hidden in Xero, but can be searched for.
    - If the invoice has the status "Void" or "Deleted", then
    a) It could be manually re-created in Xero. (It will not be connected with MRPeasy)
    b) It could be deleted in MRPeasy and re-sent to Xero, to create a new invoice.
  • A Purchase Order is not posted to Xero: 
    To quickly find the reason, please click the Add to Xero button, after which you should see a relevant error message.
    There may be several reasons:
    a) Purchase orders are posted once per 5 minutes. To synchronize immediately, click Add to Xero in the purchase order details page.
    b) The "Invoice ID" must be saved in the purchase order details in MRPeasy, before it will be posted. Please check that this is done and the PO is saved. 
    c) In MRPeasy you have enabled software setting "Several invoices per PO = Yes", in which case POs are not sent to Xero. Please open the PO and create an invoice to send a bill to Xero.
    d) The PO was created before the integration was initialized. Please open and save it.
  • A Purchase Order, or a bill cannot be updated. Error message: "Invoice not of valid status for modification"
    - MRPeasy cannot updated bills or purchase orders, which have the status "Approved", "Void", or "Deleted". Xero does not allow MRPeasy to update these.
    - If it has the status "Approved", please update it manually in Xero.
    - "Void" and "Deleted" bills are hidden in Xero, but can be searched for.
    - If the bill has the status "Void" or "Deleted", then
    a) It could be manually re-created in Xero. (It will not be connected with MRPeasy)
    b) It could be deleted in MRPeasy and re-sent to Xero, to create a new bill.
  • Error message: "Account code or ID must be specified" or "The TaxType field is mandatory"
    - Please go to Xero -> Products and services, and check that every product in the document has both purchases and sales accounts set.
  • Error message: "Organisation is not subscribed to currency ..."
    - This means that Xero does not recognize this currency.
    - Please check that currency symbols in MRPeasy correspond to international standard codes. E.g. the US dollar should be USD, not US$, the Australian dollar should be AUD, not AU$. See: https://en.wikipedia.org/wiki/ISO_4217
    - Please check that the currency is set up for use in your Xero account.
  • Error message: "(Item): the ... account is invalid"
    - This means that the configured "Purchases" or "Sales" account is incorrect for Xero.
    - The account could be incorrect in one of the two locations:
    a) If the referred item does not yet exist in Xero, then at MRPeasy and Xero integration settings. (MRPeasy -> Settings -> System settings -> Integrations -> Xero -> Change accounts)
    b) Or if the referred item already exists in Xero, then on the item details page in Xero. (Xero -> Business -> Products and services -> Item details).
    - Some special account types cannot be used for items, such as 'INVENTORY'.
  • MRPeasy is not connected with Xero any more, the system asks me to renew the connection. "Xero returned the following error: Integration with Xero has expired"
    - For security reasons, the connection between Xero and MRPeasy expires once per hour. This is the functionality of Xero.
    - When this happens, MRPeasy tries to renew the connection. Usually, this happens successfully. But sometimes the connection cannot be renewed. In this case, this message is displayed.
    - Please click the "Renew now" button at Settings -> System settings -> Integrations -> Xero -> Change accounts to restore the connection.

Old version 

Above mentioned functionality is available in the new version of the integration, from August 24-th, 2017. If you have used the integration before that day, this functionality is not available. To enable it, go to MRPeasy -> Settings -> System settings -> Integration -> Xero, disconnect from Xero, and connect again.

Support

The integration between Xero and MRPeasy is maintained by MRPeasy. If you have technical questions about the integration, please turn to MRPeasy support. However, our Support team is unable to consult you regarding the setup of your accounting in Xero.

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