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.
Important: It is essential that you use Vend'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 Vend, 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 stock order to Xero, follow the steps below:
1. Navigate to the Completed stock order page in Vend.
2. Once you've received your stock order, a Xero button will appear on the 'completed stock order' page. You can click the Xero button to create the invoice in Xero.
You can also filter the stock order page to show received orders, and click the red Xero button next to any unsent order to send it to Xero.
3. You can now click the blue Xero button, or click the View on Xero button on the stock order page to see this stock order 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
- 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 customise this on the product page.
Note: 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 Vend, and add it to the order when it is received to track stock costs for each order.
Stock Adjustments - breakage, wastage, shrinkage and inventory counts
It's also really 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 realise until you do an inventory count.
All of these different types of adjustments can be recorded in Vend using the Inventory Count feature. Check out this article to learn how to complete an adjustment or this on completing an inventory count.
Stock adjustments, including inventory counts, are not able to be directly sent to Xero. You'll need to complete a manual journal in Xero to account for these.
For more information on Using Xero on Vend, check our articles here.