Inventory management in Xero

Xero offers the option to track your inventory levels by creating products as stock tracked. This must be disabled if you intend to integrate Xero with Brightpearl.

Products will still be inventory managed in Brightpearl, however they are pushed to Xero as non-tracked items. As a result, Xero will not post COGS or inventory asset journals automatically. These journals should instead be created manually.

Why shouldn't I manage inventory in Xero?

Brightpearl is your source of truth for inventory levels. Brightpearl separates the processes of invoicing goods and shipping or receiving goods, whereas Xero does not. This means workflows are possible in Brightpearl that just aren't possible in Xero. For example, selling stock that's been received but not yet invoiced. This would inevitably lead to errors and discrepancies in the inventory levels if we did 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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