Accounting for stock/inventory costs is important to help you understand whether your retail business is making money. Your accountant will need to understand how much your stock costs you, and how much your inventory is worth.
It is essential that you use Retail POS's stock order feature when adding new product inventory. If you do not, your product costs will be incorrect.
When you're processing your stock orders through Retail POS, you'll need to send these to Xero to create an accounts payable invoice in Xero. Unlike the rest of the integration, this does not happen automatically.
To post a received stock order to Xero, follow these steps:
- Navigate to Inventory > Stock control in Retail POS.
- Filter the stock order page by Received orders. Click Update to apply the filter.
- Click the Send to Xero button under the reference to create the invoice in Xero.
- You can now click the blue View on Xero button on the order page to load the invoice in Xero.
When you pay your invoice, you can match the outgoing payment transaction in your bank feed to the accounts payable invoice in Xero.
The information sent to Xero is:
- Date the order is fully received in Xero
- Supplier name
- Products ordered
- Quantity ordered
- Order name and Supplier Invoice Number is sent to the reference field in Xero
- Supply cost (exclusive of tax); tax is applied by Xero according to your settings
- The due date is not sent to Xero, as this is the day you expect to RECEIVE the order, not the date payment is due
Remember, if you want certain products to be recorded in different expense accounts, you can customize this on the product page.
Shipping costs are not automatically included. You might like to create a "shipping costs" product with no tax, no price, and no inventory tracking in Retail POS, and add it to the order when it is received to track stock costs for each order. For more on shipping costs, click here.
Stock adjustments - breakage, wastage, shrinkage, and inventory counts
It's also important to track adjustments to your stock levels, whether they are damaged/broken stock, wastage (like food at the end of the day), or shrinkage (stolen items). Sometimes, you'll know about the loss when it happens (damaged stock, wastage), and other times, you might not realize until you do an inventory count.
All of these different types of adjustments can be recorded in Retail POS. Refer to our Processing an Inventory Adjustment guide for more information.
Stock adjustments are not directly sent to Xero. You'll need to complete a manual journal in Xero to account for these.
For more information on using Xero in Retail POS, refer to the Xero section of the Retail POS Help Center here.