Total visibility of your accounts with Xero inventory management software
Automate your accounting with a Xero inventory management system like Katana. Connect Xero with Katana to keep your inventory, sales, and accounting in sync between both platforms with minimal effort.
Streamline billing and invoicing with Xero inventory management from Katana
It’s great to be able to see where inventory faults happen and being able to fulfill orders and where the turnaround happens.”
Alaina Oehrlein
Production Lead at Essence One
We chose Katana because it seemed to be the most user-friendly software we tried – it is very easy to use and the customer service is great!”
Candice Murno
Founder and Designer at Buttercream Clothing
Katana integrates everything, making for effective company-wide resource planning and control.”
Danielle Louw
Production Manager at CT LAB
Having the shop floor know what they can or can’t make on a given day is amazing, and replaces our previous “system” of spreadsheets.”
Sara Varela
Founder and Designer at Sara Gabriel
Accurate invoicing regardless of the currency
Many manufacturers sell their products globally to benefit from the international demand. It’s also quite common to purchase raw materials from other countries to keep costs under control. While there are definitely benefits to expanding across borders, there are also challenges. One of those challenges is dealing with multiple currencies.
Luckily, Katana offers multicurrency support so that you can purchase and sell in any currency, and let Katana automatically convert the amount to your base currency. By integrating Katana with Xero, the amounts on invoices and bills are automatically calculated, so you can be sure your accounting records are kept accurate.
Directly access your documents from Katana
Connect Xero with Katana using the native integration and keep all your sales and purchase orders synced between the platforms with minimal manual effort.
Whenever you update your order status in Katana, the system automatically generates and updates your invoices based on sales orders and your bills based on purchase orders. This way you never have to worry about manually copying information from one platform to another.
Katana also lets you directly access the bills and invoices on your Xero account just by clicking on them so you don’t need to switch manually between platforms.
Take control of your inventory
To be able to run your business efficiently, manufacturers need to have a live overview of their business. Xero inventory management software like Katana provides you with real-time data about your raw materials, finished products, production processes, and much more. This information helps you make informed decisions about ordering, production levels, pricing, and more.
With Katana, you have a complete overview of the whole product lifecycle — from raw materials to finished products. Katana equips your business with all the necessary tools needed to reduce admin time and avoid human errors.
Yes, Xero has basic inventory management capabilities that allow you to track your inventory levels and costs.
With Xero’s inventory management feature, you can create and track items, set up inventory items as tracked or untracked, and view stock levels and history. You can also set up inventory items with specific details such as purchase and sales prices, reorder points, and preferred suppliers.
However, it is important to note that Xero’s inventory management feature may not be suitable for all businesses with complex inventory needs. Some businesses may need to consider installing a Xero inventory add-on.
Xero uses the average cost method, also known as weighted average cost, for inventory costing. This method calculates the total cost of items and divides that by the total number of items.
The value of the item is calculated based on the following formula:
Item Value = (opening balance value + purchases value – cost of goods sold value) / quantity on hand
Besides average cost, there are the following costing methods available:
- First-in-first-out (FIFO)
- Last-in-first-out (LIFO)
- Moving average cost (MAC)
You can maintain inventory in Xero by following these general steps:
1. Set up your inventory items
In Xero, you can set up your inventory items by going to the “Inventory” menu and selecting “Inventory Items.” Here, you can create new inventory items and set their details, such as the item code, description, unit of measure, purchase and sales prices, and more.
2. Record inventory purchases
When you purchase inventory, you can record it in Xero by creating a purchase order or bill. In the purchase order or bill, you can select the inventory item, enter the quantity and cost, and specify the account to be debited for the purchase cost.
3. Track inventory levels
Xero automatically updates your inventory levels as you purchase and sell inventory. You can view your current inventory levels and value by going to the “Inventory” menu and selecting “Inventory Items.” Notifications that warn you when inventory levels are low can also be set up.
4. Sell inventory
When you sell inventory, you can create an invoice in Xero and select the inventory item from your inventory list. Xero automatically reduces your inventory levels and updates the cost of goods sold.
5. Reconcile inventory accounts
You should reconcile your inventory accounts regularly to ensure that the values recorded in Xero match your physical inventory levels. You can reconcile your inventory accounts by going to the “Accounting” menu and selecting “Reconcile Items.”
It’s important to note that maintaining inventory in Xero may involve additional steps depending on your business’s inventory needs and the complexity of your inventory management.
While Xero is beautiful accounting software, it doesn’t offer everything needed for efficient inventory and warehouse management. The online accounting platform offers some basic inventory management solutions, but there are certain restrictions:
- It doesn’t track raw materials or work-in-progress. You can only keep track of finished goods.
- It doesn’t support negative inventory. You can only record a sale if you have the item in stock.
- Maximum of four thousand inventory items to track
If you need more advanced inventory and order management, you can use a cloud system like Katana. You can seamlessly integrate Xero with Katana to access all the necessary tools to manage your orders and inventory from a central place.
You can learn more about the features Katana offers when integrating with Xero by checking out Xero’s app marketplace or by navigating to the Xero inventory integration page.
