Xero - Monthly Inventory Journal

Last Updated: Nov 03, 2017 08:17PM PDT
On the first of each month at 1 AM Pacific, Stitch sends Xero a manual journal to account for the prior month's COGS, purchases, net change to inventory assets, and sum value of manual stock adjustments.

Note: To ensure that Stitch pushes accurate data to Xero, enter average unit cost on each of your Stitch variants prior to enabling this feature.

Manual Journal

The manual journal is sent over as a draft and is accessed via Advisor > Manual Journals.

The journal includes four aggregate inventory numbers:
Inventory Assets This is the net change in inventory assets.
Cost of Goods Sold Stitch calculates COGS based on average unit cost when an order is closed. Stitch sums all COGS values for the month and debits a direct costs account.

Stitch will only push COGS information from closed orders, regardless of the COGS setting you've selected in Stitch.
Manual Stock Adjustments This is the sum value of all manual stock reconciliations for the month.
Purchases The value of stock received via purchase order is credited against this current liability account.

Real-World Example

In your first month of business, (#1) $300 of stock was received via purchase order, then (#2) $100 in stock was reconciled up. Lastly, (#3) an order closed containing $150 of stock.
Inventory Assets + 300
Post 300 as a debit to Inventory [Fixed Asset]
Purchases total + 300
Post 300 as a credit to Purchases [Current Liability]
Assets + 100
Post 100 as a Debit to Inventory [Fixed Asset]
Stock adjustments total + 100
Post 100 as a credit to Stock Adjustments [Direct Cost]
COGS + 150
Post 150 as a debit to Cost Of Goods Sold [Direct Cost]
Assets - 150
Post 150 as a credit to Inventory [Fixed Asset]
Each of these numbers (including the net change to Inventory) is summarized in a manual journal as follows:

Critical Info

Stitch will only send non-zero values via manual journal, meaning that if unit cost isn't entered, Stitch won't have any info to send.

As a best practice, ensure that your inventory information (stock and unit cost) and order statuses (open/closed) are both up to date in Stitch prior to the end of the month. Updates made after the first won't be sent to Xero until the next month's journal entry.