Our conversion brings across the accounting data associated with Inventory and not stock management data.
About tracked Items
During the conversion process inventory items are converted as 'Un-tracked Items' this allows the items to be connected to the COGS account and the Sales account.
On the other hand your source file may allow tracked items to be connected to the COGS account, sales account and the inventory account.
Inventory accounts are set up in these files as 'other assets' and as Xero does not have an 'other assets' account the inventory accounts generally convert as a 'fixed asset'. Xero will not allow you to change the 'fixed asset' to an 'inventory asset' account so there is some manual work to implement tracking post conversion.
Setiing up inventory tracking in Xero
Setting up inventory tracking in Xero is a two step process:
Step 1: Setting up Inventory Asset Accounts & Inventory Tracking:
a. Set up Inventory asset accounts - Inventory, COG and Adjustment (Check each code and category)
b. Export Inventory items as a .csv
The details contained in the row will become the default settings for that particular Inventory Item. If the purchase and name details are missing you can copy the sale description column and paste into the purcahse description and name column.
c. At the end of the spread sheet there will be two additional colums, these are Inventory Asset Account and Cost of Good account. If you wish to track the inventory items then these two columns will need to be completed with the relevant accounts.
d. Save as a .csv
e. Import .csv into Xero
Xero will not allow you to bring in a .csv file if there are over 1000 items. If you have over 1000 items please split the .csv so that there are under 1000 items.
Step 2: Importing opening balances:
Once the items have been re-imported into Xero you can now update the opening balances.
a. Under the accounts tab select 'Inventory'
b. From the Import drop down select opening balances
c. Select your Opening Balance Date.
d. Download template with existing opening balances
e. Update template Including the quantity balances for each item
f. Save as a .csv
g. Import updated figures into Xero
If you're not changing the balance of the account that holds the value of your inventory item your Adjustment Account will be the same as your Inventory Asset Account.
If you are changing the balance of this account, the Adjustment Account and the Inventory Asset Account will be different.
For example if you want to move the balance from the original Inventory account then you will need to use this as the Adjustment Account.
Any purchase orders and quotes that are in existence will need to be updated to reflect the new accounts and details. This will ensure that the details flow into the inventory for all purchase orders, quotes, invoices and bills.
Once you have imported the opening balances for inventory it is worthwhile checking your tax defaults for the sales and purchases to ensure that this remains consistent. You can check your tax defaults for sales and purchases in your financial settings. This helps with the flow when creating purchase orders, quotes and Invoices.
If you are unsure use the Demo company for practice before importing into your Xero organisation.
Need help? You can order some Xero consulting and our Xero Certified Consultant can take you through the process.