NOTE: If you do not see options for integrating your Dx5 to Xero, please read Dx5 + Xero: Before You Integrate and reach out to firstname.lastname@example.org for assistance.
In this article:
- Connecting Dx5 to Xero
- Accounts Setup
- Contacts Setup
- Finished Products Setup
- Inventory Setup
- WIP (Work in Progress) Opening Balances
Connecting Dx5 to Xero
- Navigate to Accounting > Overview
- After reviewing the integration agreement, click Connect to Xero
- Sign into Xero to give Dx5 permission to send information to Xero
- If you have multiple Organizations in your Xero instance, be sure to select the Organization to which you will send Dx5 financial data
Once a connection is established, users will be automatically redirected to the Accounts section of the integration; it can also be accessed via Accounting > Accounts.
For each account listed (see Preparing Accounts above), choose the target destination account in Xero or select Add New Entry to create a new Xero account. Users may click Quick Map – All as New to specify new accounts for all required destinations.
Click Link Accounts to trigger the creation or mapping of specified accounts. The integration will not be usable until all destinations are specified.
Navigate to Accounting > Contacts. All Dx5 contacts will appear; as detailed in Preparing Contacts above, each customer, supplier, and in-bond recipient should be mapped to or added as a Xero contact. Displayed contacts may be filtered by Dx5 contact category using the Filter dropdown to view only Customers, Suppliers, or In-Bond Recipients.
If a name-matched Xero contact is found, the External Contact dropdown will default to that matched contact. Users may choose any contact available in the dropdown list for contact mapping; while a single Xero contact may be mapped to multiple Dx5 contacts, each Dx5 contact may only be mapped to one Xero contact.
Users may view all unmapped contacts by clicking Show Unmapped Items at the top of the list. Clicking Quick Map – All as New will select “Add New Entry” for all contacts displayed.
Click Link Contacts to save the mapping for all specified contacts; contacts may be linked in phases, but receipts from and sales to unmapped contacts will not be tied to the appropriate Xero contact unless mapping for those contacts is complete.
Finished Products Setup
To track finished product inventory and create invoices when orders are shipped, all Dx5 finished products must exist in Xero. Please note that for Xero’s purposes, each unique product size is a separate item.
- Navigate to Accounting > Finished Products
- For each product size, choose the appropriate Xero product, or select “Add New Entry.” Users may also select Quick Map – All as New to quickly create new entries for all Finished Products and VAPs.
If batch costing is already enabled, inventory average unit costs and total values reflect receipt, use, loss, and gain activity; if not already enabled, this behavior will begin with the activation of the Dx5 + Xero integration.
For all existing inventory, it’s critical that an opening inventory balance be set for each type to account for the value of existing inventory. If batch costing has been enabled prior to integration, the current average unit cost will inform the opening balance. If you’ve kept the balance of the appropriate account (e.g. Ingredients, Supplies) up to date with Dx5 inventory values, you’ll simply skip sending that value to Xero.
Note that to accommodate varying inventory costs, inventory is not tracked in Xero as inventory, but rather as an asset; Dx5 should serve as the primary inventory manager with the inventory asset account in Xero holding only the value of inventory.
With Batch Costing Enabled Prior to Integration
- Navigate to Accounting > Inventory
- For each item, confirm the total value of the on-hand inventory
- If you have not yet accounted for the value of the materials in Xero or are using Dx5 inventory costs as the source of truth for reconciliation, check “Send to Xero” to submit the value as an adjusting journal entry to Xero
- Any values sent to Xero will appear as a debit to the specified Ingredients asset account and a credit to the specified Inventory Adjustments expenses
- Click Export to Xero to submit the total inventory values for the active category, and repeat the process for all other categories as needed
Without Batch Costing Enabled Prior to Integration
If batch costing has not previously been enabled, an initial value must be set prior to integration. Please reference documentation on Adjusting Total Inventory Value to complete this process prior to integrating inventory. Alternatively, users may click Apply Defaults to All to use the Default Supplier Cost to determine total value of each inventory item. Please note that this will overwrite any existing Total Values on this page and may not be the most accurate representation of inventory value for your business.
WIP Opening Balance
To establish an opening balance for WIP (all active bulk and barreled batches), users will use a Dx5 inventory report and a manual journal entry. From this opening balance, the value of the WIP account will adjust with batch and inventory actions.
To establish an opening balance:
- In DISTILL x 5, generate a current Dx5 inventory report
- In Xero, create a manual journal entry for WIP
- In Xero, Navigate to Accounting > Reports and use the search bar on the top right to search for “journal”, then open the Journal Report
- Click “Add New Journal”
- Enter journal information
- Narration: Opening Balances
- Date: [Today’s date]
- Leave checkboxes for journal behavior as presented
- In the Account field, find and select the defined WIP account
- Maintain default tax rate (should be 0%)
- Enter the total WIP value from the Dx5 inventory as a debit. WIP should include all batch values from:
- Find and select the Inventory Adjustments account and enter the same total WIP value as a credit
- When finished, click “Post”
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