Unleashed inventory app: taking care of complex stock control

10 November 2017

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Running a business that deals with a large product range, across a number of different global locations, can create a highly complex inventory process. But keeping track of your stock, and dealing with fluctuations in currency values needn’t be an issue when you work with Unleashed and FD Works.

Southern Aqua Seafoods came to us with exactly this issue – how to get control of the inventory for their global seafood business and make it fully integrated with their Xero online accounting.

We’ve helped Southern Aqua streamline their inventory processes, connect their stock systems seamlessly to Xero, and overcome the issues they had around currency changes. And the inventory app from Unleashed has been key to delivering this solution.

Oliver Aldridge, one of our Finance Business Partners, outlines how we delivered a totally bespoke inventory solution for Southern Aqua, and how Unleashed, Xero and FD Works can bring the same inventory nirvana to your product-based business too.

The problem of a complex inventory

We’d previously worked with Southern Aqua to improve their Xero accounting and EU VAT reporting. So we were very happy to help them overcome their inventory issues, learn Unleashed and start getting a better handle on their seafood stock and finance numbers.

Southern Aqua deals with seafood stock that moves from location to location extremely quickly, so having a completely up-to-date view of their stock is a fundamental part of them having control over their business model, and being able to meet customer demand.

The Southern Aqua team were happy with the day-to-day admin tasks of logging their stock using Unleashed. What they needed us to do was make sure Unleashed was fully integrated with their Xero systems, and that the numbers all tallied up correctly.

Nearly all of their inventory is held in warehouses in Europe, so it’s recognised in euros. The challenge was that their Xero balance was in GDP and their Unleashed balance was in euros, a currency issue that was causing them problems.

This broke down into three core challenges for us to deal with:

  • Integrating with Xero – the initial problem Southern Aqua had was getting Unleashed to feed across correctly into their Xero accounts, due to the complexity of their inventory.
  • Capturing CoS numbers – full integration with Xero was needed so they could easily capture their cost of sales (CoS) numbers and be in control of their finances.
  • Reconciling the Unleashed and Xero balances – changing exchange rates were causing a discrepancy in the balances between the two different systems.

The aim of the project was to overcome these challenges, and to help Southern Aqua get the smooth, seamless inventory and accounting system they were after.

Achieving the best possible integration

Having such a huge range of apps and cloud solutions that connect with Xero is a real godsend for small businesses using Xero as their main business platform – there are now over 600 Xero apps to choose from in the Xero App Marketplace.

The challenge when adding any new app to your pre-existing Xero system, though, is making sure the integration works, that the APIs are talking to each other, and that the right data and numbers are being pulled through automatically from system to system.

Connecting Unleashed to Xero was not a problem for us. We use a wide range of Xero apps with our clients, so getting that initial integration done and dusted was our first step.

The real hurdle was overcoming the exchange rate issue between euros and GDP. This wasn’t a common problem for most Unleashed users, so we’ve worked in partnership with Unleashed to create a bespoke solution to the currency issues that Southern Aqua were experiencing.

Overcoming the hurdle of a live exchange rate

Xero has a live exchange rate feature, so sales and purchase orders raised in Unleashed in a non-GDP currency were recognised by Xero as being in a foreign currency, and are then converted.

The crux of the issue then was the stock journal adjustments that Unleashed sends to Xero via the API when a sale or purchase is made. These adjustments tell Xero to amend its ‘Inventory’ figure, and this data feeds across arbitrarily, so €100 of stock movement would enter Xero as £100.

Our concern was whether this would then make the Unleashed balance incorrect. So we spoke to the team at Unleashed to come up with a methodology that would work for Southern Aqua.

Automating your inventory and accounting

We now understood the currency issue, so the next step was to resolve the ongoing error using a streamlined solution – and that meant looking into a method for automating the inventory and accounting elements.

To do this, we built a simple Power Query that reconciles the ‘Transaction Report’ from Unleashed with the ‘Account Transactions’ report from Xero over given time periods, and compares the closing balances.

We identified three key errors that come in when attempting to get the systems to tally.

  • Error 1 – Journal entries for when an item leaves the warehouse get sent through to Xero, which tells Xero to reduce ‘Stock on hand’ and add to ‘Cost of Sales’. But the amount in euros would feed into Xero in GDP, creating an error to account for.
  • Error 2 – To keep your ‘Stock on hand’ figure in Unleashed the same as in Xero, but keep them in the different currencies, you have to account for the fact that stock that doesn’t move will change in value because the exchange rate has changed.
  • Error 3 – Purchase orders would feed across at a live exchange rate in Xero. But when you’re agreeing over an interval, you’re using an average exchange rate over that time – and that creates small errors that will also need to be accounted for.

Initially, we’d thought we could just post one journal every week and get the two systems to agree. But what we’re doing now is automatically keeping track of those identified key errors and then posting a journal as and when the current error is too great.

Setting the right foundations for your Unleashed integration with Xero

Having got to know the Unleashed system in detail on this project, we’d heartily recommend this app for businesses who want to move to a cloud-based inventory solution.

And if your business is looking to move over to Unleashed, there are a few core considerations it’s wise to think about before you start your set-up and integration process.

  • Start with the correct inventory numbers – make sure you get your starting point bang on so you know your totals, stock and key numbers all tally before you begin.
  • Define your base currency – make sure the base currency you set in Unleashed is the same as in your Xero system, or look to account for any potential discrepancies.
  • Be aware of the exchanges rates – check what foreign currency exposure there is within the business and monitor any errors that will need to be accounted for (and remember that Xero only deals in live currency figures).
  • Tell Unleashed the exchange rate – your ‘Stock in hand’ in Unleashed will appear in your chosen base currency, so you’ll need to tell Unleashed the correct exchange rate and then account for any exchange rate errors.

With those core foundations in place, you’re well placed to get Xero and Unleashed talking the same language, and to get your key inventory numbers looking shipshape.

The right inventory numbers for your business

We’re big fans of Xero’s real-time numbers, and getting your inventory processes sorted is a key element of keeping your scorekeeping, cost of sales and cash-flow numbers up to date and showing the best possible overview of your business health.

Unleashed has been an invaluable tool in helping Southern Aqua overcome the intricate nature of their inventory and currency requirements. And if you’re looking to update your inventory systems, we’d love to work with you to create an efficient Xero and Unleashed system.

However complex your business model may be, we’ve got the expertise, technology skills and problem-solving capabilities needed to create your ideal inventory system.

So you’ll get the stock, cost of sales and revenue numbers you need to stay in control of your business and continue making profits – and you’ll always be ready to meet customer demand.

Unleash your inventory

Talk to us about integrating Unleashed with your Xero system

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Oliver Aldridge is a Finance Business Partner in the FD Works finance team.