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Introducing new and improved Inventory

Posted 6 years ago in Advisors by
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Today we’re thrilled to announce enhanced Inventory to easily track the quantity and value of the products you buy and sell. We’ve had simple inventory in Xero for a while now and it’s always been handy for speeding up your quoting and invoicing. This week’s release upgrades Inventory so it provides complete inventory tracking and accounting for you.

If you have a business that sells finished products, you can now use Xero to easily keep track of the items you have on hand while ensuring your accounting records are always up to date.

Before we delve into the detail of how Inventory can work for you and how you can get started, check out this video to get a quick overview of the benefits:

Always know how much product you have in stock

Whether you’re in your office or out and about, Xero lets you know how much product you have on hand each time you enter a transaction. You can immediately identify when your inventory is running low and if you need to reorder. And if you use our Xero Touch app for Google Android you’ll see your inventory quantities are tracked there now, too.


Improve your decision-making for the products you sell

Each type of inventory item you have has an information dashboard. This dashboard shows you in real-time how many items you have in stock, what the average price is, and how much your total stock is worth. This improved visibility means you can see which products are selling well, and which aren’t. That way you can plan the right level of inventory and reorder at the right time so you don’t have too much, or too little, of anything.


How we track your inventory for you

There are now two types of inventory items: tracked and untracked. The inventory items you’re already using are still available. We’re now calling these untracked inventory items. Use untracked items for anything you don’t need to count. For example, services, freight or items you drop-ship. Use our new tracked items for any products or stock levels you need to keep an eye on.

With tracked items, Xero does all your inventory accounting for you. We continually update the inventory on your balance sheet so you always know the real-time value of your items. Your cost of goods sold is calculated for you, this allows you to keep an eye on your profit.

Tracked inventory is easy – simply enter your bills and invoices like you normally do. Inventory in Xero has always reduced manual data entry when you’re entering your invoices and bills. This is still the case – simply set up your inventory items then select them in your transactions. Just make sure you enter the correct quantities in your invoices and bills.

Make sure Inventory is right for you

Inventory in Xero is a good fit for businesses that sell finished goods. If you’re building products or have large-scale warehousing we recommend talking to your advisor. You could use one of our fantastic inventory add-ons. They work seamlessly with Xero, and are specifically for businesses that have more complex inventory requirements.

Getting started

Before you start using tracked inventory you’ll need to set up your items and enter your opening values and quantities. You can add your items all in one go, then step through our guided opening balances import.

And if you want more information on how Inventory can work for you, there are a number of other resources available to you:

  • Education videos: We’ve prepared Xero U education content for Inventory, with videos on ‘Setting up Tracked Inventory’ and ‘How to Use Tracked Inventory.’
  • Documentation: And for more detailed instructions on how Inventory works, visit our Help Centre.

Lastly, if you currently use Xero, there’s one other thing you should know before you get started:

Because Inventory now has full accounting, we’ve got a new place for it on the header. We’ve moved Inventory out of Settings and into Accounts.

What’s next for Inventory?

We’re not stopping here. We’ve got a lot planned for future releases, including additional reports, archive of inventory items, setting and managing minimum re-order levels and inventory count (stock take).

At Xero, we always love your feedback on how we can make your life easier. If there’s something you’d like to see in Inventory, go to our feature requests page in Community and let us know about it.

But wait, there’s more…

In addition to Inventory, there are a lot of other features in this week’s release, including Practice Reports, Online Quotes and Side by Side Files. We’ll be talking about these in more detail on our blog, but in the meantime you can find out more by reading our release notes. You can also join the discussion on Twitter or search for #xerospeed to keep track of the commentary.


Mark Lawton
March 24, 2015 at 11.14 am

This is great and really rounds out the product – well done!

Marvin Galang
March 24, 2015 at 11.36 am

Finally!!! Here we go. Somebody must be feeling the pressure now.

Di Crawford-Errington
March 24, 2015 at 1.17 pm

Awesome. Great news Xero. Thanks for this.

Jerry Zhao
March 24, 2015 at 1.46 pm

Great work!

Mel Morris
March 24, 2015 at 2.03 pm

Congratulations ! Looks great.

Genevieve Spence
March 24, 2015 at 2.26 pm

This will make a huge difference – thank you xero for adding yet more value to a great product.

Earl Rudolfo
March 24, 2015 at 2.41 pm

Great job, Xero team. Nice follow up to the recent announcement of integration with ecommerce app, Shopify for online retailers.

Ramiz Gorgees
March 24, 2015 at 3.06 pm

Woow Xero great job on the inventory module 🙂

Wayne Schmidt
March 24, 2015 at 3.53 pm

Cannot wait to start showing this new functionality at all my Xero client seminars for accountants.

March 24, 2015 at 7.11 pm

does the new inventory system allow for inventory to be located at several warehouses??? or is it just under one location?

March 24, 2015 at 9.23 pm

Looks like a good start! Now all I need is multiple warehouses and we can finally start using xero

David James
March 24, 2015 at 9.47 pm

Could this be the knockout blow to other on-line contenders?

Elaine Mullen
March 25, 2015 at 1.06 am

Great news Xero. So excited to show this to my clients. Congratulations Rod and team.

Elaine Mullen
March 25, 2015 at 1.12 am

Congratulations Rod and team. Can’t wait to show my clients.

Approach IT
March 25, 2015 at 5.20 am

What a useful post! It was very interesting, thanks a lot for posting it. I will definitely pass this post on, thanks!

March 25, 2015 at 9.04 am

Does this handle serialized inventory?

Peter Anderton
March 25, 2015 at 11.04 am

Thanks for all the positive feedback everyone.

@Perry – I can appreciate that this might be unworkable if you deal with large volumes of items, but you could consider setting up separate items for each serial number.

@Sam and @Matt, we decided not to include warehousing and locations in this release. Some of our add-ons partners would give you this functionality.

Please do register your interest and vote for these additional features in Xero community to help us decide what we should work on next.

Feature requests

March 25, 2015 at 11.07 am

This is brilliant with the addition of purchase orders, online quotes, and now inventory, Xero is such a well rounded accounting package for small business.

Chris Dixon
March 26, 2015 at 1.34 am

Moves the game on ……. but ….. I want more! It would have been so simple to include an order status field so when a sales order for inventory comes in it needs to be shpped, and when it has been shipped it can be tagged as shipped, then it can be invoiced …. etc. Same applies to purchase orders. Make that simple change and I’ll ooh and aah with the rest of them!

Jeri Murphy
March 26, 2015 at 12.04 pm

Yay! I have been waiting for this for a while! I implement and train extensively on DEAR and Unleashed and SO SO happy to have the chance to train on Xero with Inventory. It will help so many business owners that just aren’t big enough for the other solutions yet. #makesmehappy

I’m putting together a training session on Xero Inventory for business owners, Xero advisors and cloud integrators. Check it here if you are interested (early bird offer until April 2):

I’ll pop back early next week with a free video training series on some of the basics too! Love this! Thank you Xero for making this happen.


Anne Lovell
March 26, 2015 at 12.51 pm

I would like to clarify the timing of data entry to Tracked Inventory. Xero info states Inventory quantity and value will be updated at the time the transaction is entered – NOT the date of the transaction. This would not work for companies where supplier invoices for inventory are entered say at month end – but stock is in the warehouse say 10th of the month. Often accounts are entered later than the physical stock.
Hope you can answer this one.

Peter Anderton
March 26, 2015 at 3.21 pm

@Chris and @Anne, thanks for your feedback. I think the questions are similar in terms of timing and receipting of items into inventory.

Simple inventory in Xero uses the bill to bring the item into inventory, so unless you are relatively up to date with approving bills in Xero you may well run into timing issues if you’re holding low levels of Inventory. We don’t currently allow the quantity on hand of tracked items to go into negative so you might consider using untracked inventory items or exploring a specialist add-on if this does not fit with your business processes.

I also recommend watching this video before deciding if tracked inventory in Xero is right for your organisation:

Thanks, and keep the feedback coming either here or on the Xero Community site:

Margaret Carey
March 26, 2015 at 6.26 pm

what report can I use to reconcile my inventory asset account in the balance sheet to my tracked inventory quantities? inventory item detail includes non-tracked values and I need to run from day 1 to today to get a total. I do like the item inquiry screen with the quantities and average cost displayed as well as recent transactions.

Peter Anderton
March 27, 2015 at 8.36 am

Hi @Margaret. If you look at the new Inventory Items Details report and go into Report Settings > Group by Inventory Account – you should get the information you need. If there was a difference between your GL account and the Inventory Detail report it is likely to be due to opening balance differences as the Inventory Asset accounts are very tightly controlled.

We also have a couple of other reports on the way which will help with reconciliation and inventory counts. Thanks!

March 27, 2015 at 4.52 pm

Does it allow for non-stock items? For example, i want a stock item of labor, that has a cost price and a sale price, however i do not want it to have quantities nor count in stock reports as an item, however when i create an invoice i want to be able to select it.

Peter Anderton
March 27, 2015 at 5.13 pm

@Michael – untracked inventory items should be perfect for labor. Just don’t select the “I track this item” checkbox.

March 28, 2015 at 1.29 pm

So very excited about this Inventory update! Just one question…. I did not see a report that woyld act as a stocksheet simply listin the item and amount currently on Xero …. Is there a way to get this without the stick movements or actual costs etc….? Cheers

March 28, 2015 at 9.23 pm

I’ve been waiting for inventory for such a long time but am disappointed that it doesn’t solve the problems that always plagued my clients using other software – average cost can result in a zero quantity/non-zero value situation when a supplier credit note brings the quantity to zero but the average cost is not the same as the cost on the credit note.
I have also noticed that inventory adjustments are done one item at a time. This will be extremely time consuming when the adjustment is as a result of a stock take or when the adjustment is between 2 stock items.
I’m sure there will be a lot of improvements to inventory over the next few months and I’m hoping these issues will be addressed along with more reports.

Peter Anderton
March 30, 2015 at 9.48 am

@Janet – For the moment we have the new inventory items details report and we expect to deliver an inventory items list and summary in the next month or so. For now you could group the report by Inventory Account and sort by the Item name which may help.

@Marilyn – The zero quantity/non zero value example is an interesting one. We validate to ensure we don’t allow you to post a credit note if you are in that situation and link off to help if that does happen. You might consider a revaluation adjustment to the COGS account to bring it from the average to the credit note price. Good point around the one by one adjustments. We are considering a bulk import of adjustments, but we are keen to provide the inventory items list before we do look at bulk adjustments.


April 10, 2016 at 3.22 am

Do you have a way to enter our inventory starting value and changes to that value that will then be used in reports that contain COGS and as an asset in the balance sheet? We do not want to track individual SKUs only the total inventory value and changes to that value.

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