Xero advises not to use its' inventory tracking for manufacturing companies (https://help.xero.com/us/InventoryTracked$Suitable).
Most accounting software packages track inventory as follows:
- when a purchase order is created, the item is added to inventory;
- when an invoice is created, the item is subtracted from inventory.
This needs to be the same item. Usually, an 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 labour costs;
- differentiate between the date when documents are created and items are shipped.
MRPeasy can do all of the above, thus inventory tracking needs to be done in MRPeasy.
Read more on Xero integration.