Periodic method for Xero

Periodic method for Xero

Overview

There are specific things to setup if you use the periodic method in Xero. For information about this, or if you are unsure of which method you use, please see Perpetual Method and Periodic Method.

If you have any questions about how best to set up your account, our Accounting Specialists will be happy to configure Cin7 Omni for you. Just contact your onboarding specialist or the support team.

Before starting the configuration process, you must have done the following:

  • Decided which inventory accounting method to use - Perpetual or Periodic.

  • Set up your General Ledger Accounts correctly.

  • Set up all the tax rates in Xero that you are likely to use.

  • Discussed all of the above with your accountant.

Once the above has been confirmed, navigate to the settings page to configure Xero:

  1. Log into Cin7 Omni as an Administrator.

  2. Click on your name, top right, and select Settings.

  3. Select Accounting, click Xero Setup.

  4. Click Default Accounts.

Once you have finished, click Finish.

Choose how your integration works

The first step is to decide how your integration operates.

Is multi-currency

If you buy/sell in multiple currencies, you will need to select Yes. You must have the correct Xero pricing plan to add multi-currency.

For more information see Multi-Currency with Cin7 Omni and Xero.

Is mainly B2B?

If a majority of your sales are to other businesses, choose Yes.

Merge sales order product lines into one line

If you are likely to have a high volume of transactions pushing to Xero each month, you may wish to combine your line items into one to keep within Xero's data limits.

To enable this, choose Yes.

You can change this setting at a later date.

Update Transactions for Number of Past Months

Use Update Transactions for Number of Past Months to select the number of past months’  transactions you want to be able to sync from your Xero dashboard.

Upload invoices and credit notes
If you wish to import your sales invoices and customer credit notes directly as approved in Xero, you will need to select 'AUTHORISED'. If you instead wish to import them as draft for review, you will need to select 'DRAFT'.

Upload supplier invoices and supplier credit notes
If you wish to import your bills and supplier credit notes directly as approved in Xero, you will need to select 'AUTHORISED'. If you instead wish to import them as draft for review, you will need to select 'DRAFT'.

Inventory method
Select Periodic from the dropdown.

Setup default accounts

Default accounts are the general ledger (GL) accounts in Xero that Cin7 Omni transactions are sent to, unless otherwise specified by an 'alternative GL account'.

For the periodic method you will need:

  • An expense account for Purchases.

  • A revenue account for Sales.

If there is more than one relevant account you could use, it makes sense to make the default account the account to which a majority of transactions are sent.

List ledger accounts

In the form in this section you decide how Cin7 Omni should code transactions. You should read the descriptions below, then enter the relevant account numbers into the blank fields.

Account name

Account code

Account type

Appears in Xero

Used for

Stock On Hand*

Xero Account Number

Expense

P&L

The Purchases account to which Cin7 Omni sends transactions.

Sales

Xero Account Number

Revenue

P&L

The primary Sales account that is used in Xero.

Surcharge

Xero Account Number

Revenue

P&L

If you wish to split surcharges - such as credit card fees - into a separate account. This is commonly the same as your Sales account above.

FreightSales

Xero Account Number

Revenue

P&L

If you wish to split freight sales into a separate account.**

This is commonly just the same as your Sales account above.

COGS

Leave Blank

Direct Costs

P&L

Leave this line blank if you are using Periodic.

PurchaseDirectCost

Xero Account Number

Expense

P&L

This must be the same account that is used for Stock On Hand. This informs the systems that you are using the periodic method.

Adjustments

Leave Blank

Overhead

P&L

Leave this line blank if you are using Periodic.

* Though the system field is called Stock on Hand, this will be a Stock Purchases account in Xero.

** Freight sales constitute the revenue you receive from your customers when you charge them for additional shipping fees, not the cost you pay couriers for freight.

Setup alternative GL accounts

You may not want all your transactions to go to the same default account each time. For accounting reasons it may be desirable to have - for instance - wholesale transactions go to a wholesale GL Account, and retail sales go to your default GL account.

As stated above, it makes sense to set your default account as the account to which a majority of your transactions should go. Use the Alternative GL Accounts for exceptions to the default.

Keep it simple

When considering how to set up your alternative accounts, remember that Cin7 Omni has comprehensive management reports that can be used to make business decisions such as the performance of a particular branch, brand or customer group. You will use Xero primarily for Financial Reporting.

Our recommendation is to keep your accounting setup as simple as necessary for Financial Reporting, then use Cin7 Omni to produce Management Reports.

For more information see Setting up Alternative GL Accounts.

Setup tax rates

To create Tax Rates in Cin7 Omni, simply download your Tax Rates from Xero. To do this:

  1. From the left navigation select Accounting, the click Xero.

  2. Click Get Tax Rates at the bottom of the list.

Although it is possible to manually create or update Tax Rates in Cin7 Omni, we recommend creating these Tax Rates first in Xero - to ensure they are set up correctly - then redownloading them from Xero.

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