Breww to periodically sync stock valuation journal entries to accounting platforms (e.g. Xero)

Hi,

anyone able to shed any light on how we can manage the depletion of inventory units in production, and sending the used item details (and therefore associated costs) over to Xero. Ideally so we can get a more complete picture on COGS in our accountancy software based on when the inventory is used, rather than just when it is purchased. currently Xero is being told when we are receiving items of stock into inventory, but has no record back to tell it those items are either now being consumed in the production of wort, or packaged into saleable units.

Thanks,
Mike

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I’d like to see this too. See my post Inventory receipts and suppliers now sync to your accountancy provider - #2 by erik-geupel.

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Thanks Mike.

At the moment Breww doesn’t increase the quantity of stock of items when an inventory receipt is uploaded to Xero. We’d recommend linking this to an “Expense” account instead of an “Asset” account as then there is no need for depletion (for things to “balance” at least).

We’re happy to consider adding support for syncing inventory levels to Xero in the future, but it’s not going to a done in the short-medium term, I’m afraid. Keeping this sort of information in sync between two platforms is very complex and error-prone. We’d highly recommend getting COGS reporting from Breww where the data is always correct and cannot become out-of-sync.

If you can’t get the COGS data you need from Breww currently, could you give us some insight into why and we’ll happily look at making updates to the reporting available? Cheers.

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I too would like to see this feature. Xero (our accounting package) should be considered the source of truth for everything related to assets/liabilities/expenses. Simply allocating ingredients to an expense is not the correct answer from an accounting perspective as those ingredients are considered an asset until consumed/transformed. By assigning all ingredients to an expense, the asset category in Xero’s balance sheet is no longer accurate of what the true assets of the brewery are.

Other brewery management platforms use a series of manual journal entries to move the cost of inventory through the process from Raw Materials to Work in Progress to Finished Goods.

This would be a a better way to process the purchase use and sale of anything in breww. instead of having to manually journal stock adjustments each time a stock count is performed.

I totally agree with the above comments.

Much welcomed and needed accounting function.

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Thanks for your comments. I can see that for a number of breweries, this seems to be relevant, so I am going to open this up as a community Feature request for you.

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Hi Connor, thanks for the update on this. I am struggling to find this feature request though, any chance you can point me in the right direction?

This post itself was converted to a feature request (from just a question in the help centre), which will preserve the comments etc. You can use the vote button at the top of this page to add your vote.

This would make a massive difference to our ability to understand the profitability of the business

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Thanks, everyone. It would be useful to hear why our current suggestion of using Breww’s monthly Stock Valuation reports to let Xero/others know the value of your current assets (stock of stock items and packaged beer) isn’t working for the people who have voted for this?

I agree, unless you track their value in Xero by keeping an asset account in sync with Breww’s stock valuations. Or am I missing something here?

In Breww’s valuation, if an ingredient is added to an in-progress batch of beer this doesn’t change the valuation. The ingredient hasn’t suddenly become worthless (even though it’s no longer in its original form) and it’s also not really worth more than it was before (you can make it so with a “WIP value”). Once the beer is packaged, it will almost certainly become more valuable than the sum of its components as it’s now a finished good.

For Breww to track every single movement of every item through to Xero/others, is massively error-prone (e.g. you use an ingredient on a batch and then realise you didn’t and undo it - there are so, so, so many scenarios to get right)… but to tell Xero once per day/week/month “this is the value of my current assets” by using Breww’s stock valuation feature would remove all the risk of keeping huge numbers of movements in sync between two platforms and still mean that Xero has an accurate understanding of your stock value.

I appreciate this is currently a manual process, so should the feature request instead be for Breww to automatically sync this asset value figure to Xero/others?

It’s possible that I’ve misunderstood something, and I’m not an accountant, but I must admit that I don’t feel that this suggestion as-is is the right solution to the problem. And I feel the solution is to simply use Breww’s Stock Valuations. If you disagree, please do let me know why as we’re looking to build the best possible platform and I’m happy to admit that I’m mistaken :smile: Thank you :pray:

Hi Luke, syncing the monthly closing stock number automatically would be a great start, however one thing that would not achieve is splitting out the cost side into different components. For example its pretty important to track wastage. We are also trying to track profitability by type of sale, so we know we make more profit on sales direct to customer, but being able to track that in Xero would be super helpful.

One approach would be to push a daily “bill” into Xero which breaks down the cost of goods sold by sales order, also separating out any samples / wastage etc. Even better would be the ability to see the different stages, so purchases initially get added to raw materials which again pushes an adjustment into the accounting software, then when raw materials are consumed an adjustment is made to move the value into WIP, then when the product is packaged a further adjustment moves the value into finished goods (which should be valued at cost, i.e. the sum of all the components including packing), and finally when the product is sold that value is moved into COGS.

Possibly instead of pushing huge amounts of data around every day this could be achieved by generating monthly journals in Xero?

Really happy to have a call to discuss if that would help.

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The issue seems to boil down to having a periodic inventory system or a perpetual inventory system. (Good explanation of the differences here: www.accountingcoach.com/inventory-and-cost-of-goods-sold/explanation.) Breww does not support maintaining a perpetual system that syncs with accounting software. Would be nice but as Luke points out, it’s a big ask. (I’ve used brewery management software that supported it: it generated many many journals in the accounting SW, was subject to bugs and almost impossible to back out mistakes.) So given that we are restricted to a periodic system, how to implement?

  1. Make sure you have the following accounts in your accounting SW: Inventory, COGS and Purchases.
  2. In Breww’s accounting SW integration settings, set the default expense account (used for inventory receipts) to Purchases.
  3. Create a monthly repeating journal with the following 3 pieces of information:

A) New end-of-month inventory value (from automatically generated Stock Valuation report in Breww)
B) Current value of Purchases in your accounting SW
C) Previous end-of-month inventory value (the current value of Inventory in your accounting SW)

Utilising the fact that COGS = Beginning Inventory + Purchases - Ending Inventory, the monthly journal is:

COGS: Credit A
Inventory: Debit A
Purchases: Credit B
COGS: Debit B
Inventory: Credit C
COGS: Debit C

It would be nice if Breww could automate filling in the numbers for this journal somehow.

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Hi Luke, this sounnds like a great start. I’d love it to be daily rather than monthly if possible so we can see the correct gross profit more than once a month. Cheers!

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