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:

  • Connect manufactured products and their parts (e.g. if a manufactured product is produced, the software cannot deduct its parts from stock).

  • Add additional costs when calculating the cost of goods sold (e.g. manufacturing or labor costs).

  • Operate according to FIFO.

  • Differentiate between the date when the documents were created and when the items were shipped.

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

Read more on Xero integration.

Need more information? Check the User Manual or open a Support Ticket.

1. With a well-designed integration configuration and Xero usage pattern, the reports in MRPeasy (in points 2, 3, and 4 below) can correspond 100% to Xero accounts.

However, in other setups, these numbers may be more difficult to compare.

  • Mainly this is due to the fact that the balance synchronization does not work by comparing some accounts in MRPeasy and Xero. Instead, complete transactions are posted onto corresponding accounts.
  • The Xero accounts may additionally be affected by
    • different starting balances,
    • other transactions from Xero,
    • and non-standard accounts mappings of the integration (e.g. a product's inventory account is mapped on the WIP account).

What always can be compared one-to-one are:

  1. The manual journals made by MRPeasy in Xero.
  2. And the corresponding detailed reports in MRPeasy.
    These can be found at MRPeasy -> Settings -> System settings -> Integrations -> Xero -> Synchronization logs.


2. The overview of the movements of goods and the inventory balance can be seen in the Stock -> Stock movements report. 

  • Be aware that the displayed WIP value there represents a different thing than in the context of Xero integration.
  • In stock movements, WIP is only the value of used materials in unfinished production.
  • More about this report: /resources/user-manual/stock/movement/


3. The WIP in the context of Xero integration is the total cost of unfinished manufacturing orders, including direct labor and applied manufacturing overhead.

The total cost of unfinished manufacturing orders can be found in Production planning -> Statistics reports by looking at current unfinished manufacturing orders.


4. If the MRPeasy Standard Accounting module is enabled, the "Work In Progress" account will also reflect the WIP the same way as the Xero integration, the inventory accounts can be configured to reflect those in Xero, etc.


5. When comparing balances, some additional limitations of the integration should be kept in mind:

  • Transactions in MRPeasy and Xero may have different dates.
    • Transactions inside MRPeasy reports can sometimes be backdated (the transaction was created at a later date, but it is effective from an earlier date).
    • Transactions are never posted to Xero as backdated. These are posted with the date of the synchronization.
  • The automatic synchronization happens once per day every evening. To force synchronization now, press Synchronize now at Settings -> System settings -> Integrations -> Xero
Need more information? Check the User Manual or open a Support Ticket.
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