Inventory management in Xero

Tracking inventory in Xero is optional, but not recommended. If you choose to manage inventory, this can be configured in the connector settings. Products are pushed to Xero as inventory managed items and Xero will automatically account for received stock and shipped stock as POs and SOs are invoiced in Brightpearl.

If you choose not to manage inventory in Xero, the option can be entirely disabled in the connector settings. Products will still be inventory managed in Brightpearl but they are pushed to Xero as a non-tracked items. As a result, Xero will not post COGS or inventory asset journals automatically. These journals should instead be created manually.

Why isn't inventory managment recommended?

Brightpearl should be your source of truth for inventory levels, and as such the in-stock quantity itself is not required in Xero.

Complex workflows are possible in Brightpearl, such as invoicing before shipping/receiving stock or shipping/receiving before invoicing. These workflows are not possible in Xero and inevitably lead to discrepancies in the inventory levels if you do attempt to sync stock.

Brightpearl accounts for inventory using FIFO and landed costs can be allocated against your stock items to gain a more accurate picture of inventory value and cost of goods sold. Xero uses average costing which isn't ideal for most retailers. 

For these reasons, we recommend not managing inventory in Xero. Your COGS can be reported on in Brightpearl at month end and then entered into Xero as a journal.

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