How stock value and cost of goods sold reach Xero

When we ask a customer to leave inventory untracked in Xero, the bookkeeper needs to know how stock value and cost of goods sold will reach the accounts. At month end, they retrieve those figures from Workhorse, validate them using audit reports and post journals to Xero.

The reporting is defined specifically for the customer. A stock total and a cost-of-goods-sold total may be enough for some businesses. Others need those figures broken down to match the way they keep their accounts and review how the business is doing.

Deciding what the reports need to show

Stock may have several categories the customer wants to capture separately. Cost of goods sold may need to be reported by the sales channel, product category or another grouping. We define the reports around those requirements, so the figures retrieved at month end have the breakdown the customer needs.

The two reports do not necessarily need the same structure. For example, a business might want its stock value split by product category, while looking at cost of goods sold by sales channel. One tells it how much stock value sits in each category; the other lets it compare the cost of sales through each channel with the corresponding revenue.

That is something to work through with the person preparing the accounts. How the warehouse groups its products may be useful operationally, but the bookkeeper may need a different view of the same stock. Understanding what they need to report helps us define the reports they will use each month.

Validating the values

Once the figures have been retrieved, the customer uses audit reports in Workhorse to validate them before posting the journals. The summary figures are the starting point for that check.

The audit reports support the review of those values. If a figure needs explaining, that needs to be worked through before it is taken into the accounts. Retrieving a report and accepting its total are separate steps in the process.

When the customer is satisfied with the values, they post the journals to Xero using the breakdowns required for their accounts. The reporting requirements therefore need to cover both the figures to be posted and the audit information used to validate them.

After the journals are posted

From that point, the work follows normal accounting practices outside Workhorse. Workhorse has supplied the operational values and the reports used to check them; the customer continues their accounting work in Xero and elsewhere as usual.

With monthly journals, the stock value in Xero reflects the last month-end posting. For the current stock position between month ends, the customer looks in Workhorse. Anyone reviewing the accounts during the month needs to know when those stock values were last updated.

Our Xero integration page explains the connection in more detail. If you are assessing Workhorse for a business, the stock categories and cost-of-goods-sold breakdowns its bookkeeper needs are useful things to bring to the conversation.

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