Managing Stock

There are three main ways you can use Xero to manage the things you sell regularly.

1. Create an inventory of items you sell regularly. These can include the default price, account, tax rate and description. This works whether your business sells goods or services. It saves you time because you don't need to retype these details every time you sell.

2. Track your inventory. This approach records the amount of stock you hold, and you'll need to keep your sales and purchase records up-to-date. It only works with finished goods you have in stock, and you can't have a negative balance. Finally, it's difficult to change a tracked inventory item to untracked inventory, so it's important to be sure it's right for you before using this option. (You can use a mix of tracked and untracked inventory items if appropriate).

3. Use an inventory app. You'll find these in the Xero Marketplace. We often recommend Unleashed, however the choice of app will depend on your requirements. These apps integrate directly with Xero. They keep your accounts up-to-date, while providing a powerful stock management system, often with other features such as eCommerce.

Read more at Xero Central.

Manually input

Add inventory items by:

1. Go to Business > Products and Services and click New Item.

2. Complete Item Code and Item Name.

3. Check 'I purchase this item' and/or 'I sell this item' and add any further details. This can include Unit Price, Sales Account (e.g. 200 Sales), Tax Rate (e.g. 20% (VAT on Income)), Sales Description (for my customers). Price, tax and sales description will appear on quotes and invoices when you select the item, however you can edit these before sending to your customers, apply discounts etc. If you're a service provider, include your schedule of rates in your inventory (e.g. site survey £x, or hourly rate £y).

4. Click Save.

Read more about adding items, creating reusable text for invoices, quotes and purchase orders and using untracked inventory for services at Xero Central.

Upload data

Alternatively, import your inventory by downloading the template, entering your data, uploading the completed template, then checking your inventory.

Using your inventory

When creating quotes, invoices, purchase orders, spend money or receive money transactions, simply select the Item from the drop down list rather than manually entering the details.

Report on inventory items

Go to Accounting > Reports, Summary tab, Inventory section. Select either the Inventory Item Summary or Details to see how much you've bought and/or sold.

How does tracked inventory differ from standard, untracked, inventory?

When you use tracked inventory, Xero automatically keeps track of your stock levels, based on items bought / sold and stock adjustments.

However tracked inventory isn't suitable for every business, including:

• if you sell goods before you've bought them

• you only update your stock / inventory at month or year end

• you want to track components that make up finished goods

• you regularly buy and sell in different currencies

• you have more than 4000 inventory items to track

As well as current stock balances, tracked inventory will show stock value and average item cost.

Learn more about tracked inventory at Xero Central.

Setting up tracked inventory

We'll help you:

• set up your chart of accounts for tracked inventory, including an inventory asset account and cost of goods sold account if they are not already showing in the default Xero chart of accounts

• choose a start date

• add tracked items to Xero

• enter opening balances.

Learn more about setting up tracked inventory at Xero Central.

Adjusting tracked inventory

We may need to adjust your inventory from time-to-time, e.g.

• if stock has been lost or damaged

• if you've bought new stock which hasn't been tracked

• if stock needs to be revalued.

We'll do this by making an inventory balance adjustment.

Learn more about adjustments at Xero Central.