There is some important information that needs to be considered when reconciling stock on hand between WokGuru and Xero due to the way the FIFO/perpetual inventory method works.  It is recommended that stock on hand is always reconciled for the previous months, not the current.  This is due to the methods ability to update historical purchases and re-cost corresponding COGS.  

Perpetual Inventory Method Overview

The perpetual/FIFO inventory method is able to continuously record inventory changes in real time per transactions. Due to this, it is sometimes difficult to reconcile the stock on hand value directly with Xero during the month due to the constant changes.  WorkGuru maintains Xero's stock on hand value with the following transaction:

Stock purchase orders (FIFO products only)
Increases stock value
Cost of Goods Sold (COGS) 
Decreases stock value
Supplier credit notes (If returned to supplier)
Decreases stock value
Client credit notes (If returned to inventory)
Increases stock value
Increases or decreases stock value (depending on counts)
Increases or decreases stock value (depending on direction)

By default, WorkGuru consolidates the COGS into a monthly journal to be sent to Xero as one journal at the end of each month. Due to this method, the optimum time to compare the stock on hand values between WorkGuru and Xero is at the end of the previous months, assuming the recommended end of month procedures have been run.  Note:  If the COGS journal is manually sent to Xero earlier in the month, subsequent sending of COGS during that month will update the existing journal, not create multiples.

Reconciling Differences in Stock on Hand Between WorkGuru and Xero

An advantage of using the perpetual inventory method is that WorkGuru knows exactly which transaction caused a change in stock on hand and when it happened. If you notice a discrepancy between the stock on hand value between WorkGuru and Xero, you can quickly drill down to the transaction level to identify where an imbalance has occurred when compared with Xero.

When was WorkGuru and Xero Stock on Hand Balanced?

Ensure that WorkGuru and Xero were balanced correctly at a specific point in time, usually via the initial or first stocktake.  If this step was skipped or incorrect, even if all the corresponding transactions and journals from WorkGuru are correct, the stock on hand value between the two systems will never match.

Are Your COGS, Stocktakes and Stock Adjustments Up to Date?

Ensure that the COGS last sync date, stock takes and stock adjustments are up to date in the Xero queue.

Detailed COGS Comparison

Click the See detailed Cogs link to open the COGS journals comparison report.  This report breaks down the monthly COGS totals from all the relevant transactions in WorkGuru. The comparison report allows you to resend previous months COGS journals through to Xero if updates are required  by using the Resend to Xero link next to each month.

The Cogs Journals Comparison Report can be used to reconcile the individual monthly transactions with the Xero stock on hand account.  

You can also drill into the detailed COGS for each month by clicking on the change in stock value.

The COGS Journal Analysis page will display the source transactions that have contributed to the monthly COGS totals broken down to individual product SKU and value grouped by:

  • Projects
  • Production Jobs

Note: Even though the following are currently displayed, they are now sent through to Xero individually to allow more detail in Xero.

  • Stock Sales
  • Stock Adjustments

All of these transactions can be exported into a CSV file for further analysis/comparison directly with Xero etc.

Common Causes for Stock Value Discrepancies

  • Purchase order Receive and Invoice Dates - WorkGuru will allow you to receive stock without an invoice or cost an order without receiving the stock.  The WorkGuru stock on hand will increase based on the receive date.  Xero's stock on hand date is increased based on the invoice date.
  • Up to date COGS not sent to Xero - Ensure your last sync date is as up to date as possible before comparing stock on hand balances between WorkGuru and Xero.
  • Landed costs re-coded to Expenses - Ensure that any transaction that is allocated as a landed cost in WorkGuru is not re-coded from stock on hand to expenses in Xero.
  • Stock purchase order values changed after import - If a purchase order has been modified after import to Xero.  Use the Compare Purchase Orders with Xero function to check for any imbalances.
  • Locked Periods in Xero - Locked periods in Xero will prevent correct COGS journals from WorkGuru from updating previous months/periods.  The perpetual inventory method allows COGS to be updated for previous periods as must be allowed or managed manually.
  • Manually created journals in Xero - The only reason for a manual journal in the Xero stock on hand account is for matching the starting WorkGuru stock on hand value to Xero.   Any manual journals made in the Xero stock on hand account are not required and not visible in WorkGuru.