When you connect Xero, Qoblex stays in charge of your stock. Qoblex counts your quantities and works out the value of every stock movement, then posts that value to Xero as accounting entries against your Stock On Hand and Cost Of Goods Sold accounts. Xero is your set of books; Qoblex is your inventory system.
For this to produce correct numbers, the products Qoblex sends to Xero must be untracked items in Xero, meaning Xero shows the item and its value but does not keep its own quantity on hand or cost for it. This article explains why untracked is the correct setup, walks through a worked example of what happens when the same items are tracked in Xero, and covers the situations, especially made-to-order selling, where tracking the items in Xero causes sales to fail or your books to double up.
How Qoblex and Xero divide the work
Qoblex and Xero are not both meant to manage inventory. They each do one job:
- Qoblex owns your stock. It records how many units you have, and it calculates what each unit is worth using your own costing, including landed costs and moving average cost. Every time stock moves (you receive a purchase, make a sale, adjust, transfer, or build a product), Qoblex works out the value of that movement.
- Xero owns your books. Qoblex sends the value of those stock movements to Xero as journals: the value of stock you are holding goes to your Stock On Hand Account, and the cost of items you have sold goes to your Cost Of Goods Sold account. Your sales invoices post the sale amount to your sales account.
Because Qoblex already sends Xero the value of your inventory, Xero must not calculate that value a second time. That is exactly what an untracked item does: it lets Xero show the item code and price on invoices and bills without Xero managing quantity on hand or cost of goods for it.
Qoblex automatically sends your products to Xero as untracked items. The care you need to take is with any items that already exist in your Xero organisation, or that someone sets up directly in Xero, because those are the ones that can end up tracked.
Make sure your Xero items are untracked
In Xero, an item is either tracked or untracked, controlled by the I track this item option on the item in your Xero Products and services list:
- Untracked (correct): the I track this item box is not ticked. Xero holds the sales and purchase details but no inventory asset account, quantity, or value. This is how Qoblex creates its items.
- Tracked (causes the problems below): the I track this item box is ticked and the item has an inventory asset account. Xero then keeps its own quantity on hand and average cost and moves that value every time the item appears on an approved invoice or bill.
Do not tick “I track this item” in Xero for the products Qoblex manages. Let Qoblex post your inventory value through the Stock On Hand and Cost Of Goods Sold accounts, and use Xero for reporting. Tracking the same items in Xero makes Xero value them a second time and double-counts your inventory.
If you used Xero inventory before Qoblex, you may already have tracked items with the same codes. Untrack them in Xero (or ask your accountant to) before you rely on the sync, so the value Qoblex posts is the only inventory value in your books.
A worked example: one sale, valued twice
Suppose you hold 10 units of a product, bought at a landed cost of $6 each, so $60 of stock. You sell 5 units for $20 each.
With the item untracked (correct):
- Your sales invoice posts $100 of revenue to your sales account.
- Qoblex posts one inventory journal for the shipment: $30 to Cost Of Goods Sold and $30 out of Stock On Hand (5 units at your $6 cost).
- Result: revenue $100, cost of goods sold $30, and stock on hand reduced by $30. Each figure is recorded once.
With the same item tracked in Xero (wrong):
- Your sales invoice still posts $100 of revenue.
- Qoblex still posts its inventory journal: $30 to Cost Of Goods Sold, $30 out of Stock On Hand.
- But Xero also reduces its own tracked quantity by 5 units and posts its own cost of goods sold and inventory reduction for the same sale, using Xero’s average cost.
- Result: the sale’s cost is booked twice, so cost of goods sold and the reduction in stock on hand are roughly double what they should be. Your profit and your inventory asset are both wrong.
There is a second problem hiding in the same example. Xero’s average cost is not calculated the way Qoblex calculates cost. Qoblex uses your landed costs and moving average cost; Xero would use its own running average from whatever it has recorded. So even the amounts the two systems book would not agree, and your inventory value in Xero would never reconcile to Qoblex.
Made-to-order and pre-order products
This is where tracked items break sales outright, not just the numbers.
A made-to-order (or pre-order, or build-to-order) product is one you sell before you have it in stock. You take the order, then you buy or build the item to fulfil it. At the moment you raise the invoice, your quantity on hand is zero.
- Untracked (works): Xero does not check stock, because it is not tracking this item. The invoice posts normally. Qoblex records the cost of goods sold when you actually fulfil the order, based on the real cost once the item exists.
- Tracked (fails): approving an invoice for a tracked item makes Xero try to reduce stock it does not have. Xero refuses to approve a sale of a tracked item when there is not enough quantity available, so the invoice cannot be created and the sync fails. Selling made-to-order items is simply not possible while those items are tracked in Xero.
If you sell made-to-order, pre-order, or back-ordered items, they must be untracked in Xero. Xero blocks invoices for tracked items that have no stock available, so a tracked made-to-order item cannot be invoiced at all.
Other situations where tracking causes problems
Tracking your Qoblex products in Xero causes trouble well beyond a simple resale. In every case below, keeping the items untracked and letting Qoblex post the value is the fix:
- Manufactured and assembled products. Qoblex consumes components and produces finished goods, and posts the resulting value. A tracked finished good or component in Xero would try to move stock on its own and clash with Qoblex’s build.
- Bundles and kits. Qoblex sells a bundle by moving its component stock. Xero cannot represent that, so a tracked bundle or component double-counts or blocks the sale.
- Drop-shipping. Goods ship from your supplier and never sit in your warehouse. A tracked item would still expect quantity on hand and can block the invoice.
- Stock adjustments and transfers. Qoblex posts write-offs, shrinkage, and location transfers to your inventory and adjustment accounts. Tracked items in Xero would try to revalue the same movements.
- Opening stock. When you start, Qoblex posts your opening inventory value. Tracked items would ask you to enter opening quantities and costs into Xero as well, creating a second, conflicting valuation.
- Negative or oversold stock. Qoblex lets you record sales that take stock temporarily negative and reconciles the cost later. Xero will not reduce a tracked item below zero, so those sales fail to sync.
When you can leave a product tracked in Xero
If you have items in Xero that Qoblex does not manage, for example a service, a fee, or stock you keep entirely inside Xero and never sell through Qoblex, those can stay however you set them up in Xero. The untracked rule applies only to the products Qoblex syncs and holds stock for. Keep Qoblex-managed products untracked; manage anything else in Xero as you normally would.