Xero Integration - Basics

Once DEAR Inventory and Xero are connected, DEAR Inventory becomes the central point of all inventory management within your business. This means that all inventory-related purchases, sales, and manufacturing will be performed in DEAR Inventory and then synchronised over to Xero.


NOTE: If necessary, you can easily switch between accounting apps, such as changing from Xero to QuickBooks Online, switching from one Xero organisation to another, or disconnecting Xero/QBO to use DEAR as a standalone accounting system. For more information, refer to Switching Accounting Integrations.


We recommend reading the Getting Started Guide together with this setup article. 


A video tutorial on Xero Integration is also available.


NOTE: Xero Inventory functionality is not compatible with DEAR. If you already have stock recorded in Xero using Xero Inventory, you will have to remove it and re-create in DEAR.


Prerequisite

  • Xero account (trial account is sufficient)


Table of Contents


Setting up Accounts in Xero

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You will need to sign up for an account or trial account with Xero before continuing. A trial account is sufficient to connect with DEAR. 


The chart of accounts is the list of all accounts your organisation has available to record your transactions and is important for classifying your transactions correctly and keeping your accounts accurate.


NOTE: If you are using Xero as your primary accounting system, you must create/manage your accounts from Xero. They will be imported into DEAR when you synchronise your accounts. You can view your Chart of Accounts in DEAR by going to Settings Reference Books Financial Chart of Accounts, but it will be read-only. 


Before starting your integration, some accounts must first be created in Xero. You can add more accounts to suit your business requirements – if you are unsure, consult with your accountant or bookkeeper before adding or editing any accounts. 


The accounts needed for DEAR to function correctly are listed below with their required settings.


Accounts already created by Xero

  • Accounts Receivable
  • Accounts Payable
  • Sales Tax (GST, VAT...)
  • Sales/Revenue


Required accounts

You will not be asked to map these accounts when connecting to Xero for the first time; however, they allow you to fully make use of DEAR's functionality. You can create these accounts in Xero at any time.

AccountAccount TypeAccepts Payments
Inventory Control (see note)Current Asset

Do not enable payments

Inventory DiscrepancyExpense

Do not enable payments

Cost of Goods Sold*Direct Costs (DEAR standalone/Xero)
Cost of Goods Sold (QBO)

Do not enable payments

Work in ProgressCurrent AssetDo not enable payments
Supplier Deposits/Prepayments*Current AssetEnable payments
Customer CreditsCurrent LiabilityEnable payments

*may already be created by Xero


NOTE: Xero pre-loads a default Inventory account; however, it does not have the correct settings for DEAR to function correctly. You will have to create a new one with the settings listed above. 


Optional Accounts

Inventory Accrual/Stock in Transit (requires Inventory Accrual to be enabled)

AccountAccount TypeAccepts Payments
Inventory Accrual (Goods Received, Not Invoiced)Current Asset OR
Current Liability
Do not enable payments
Stock in Transit (Goods Invoiced, Not Received)Current AssetDo not enable payments


Gift Card Liability (requires Gift Cards to be enabled)

AccountAccount TypeAccepts Payments
Gift Card LiabilityCurrent LiabilityEnable payments


Creating an Account in Xero

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If you are using Xero as your primary accounting system, you must create/manage your accounts from Xero. The accounts will be imported into DEAR when you synchronise your accounts.


Create an account in Xero:

  1. Log on to your Xero account.
  2. Go to Accounting Advanced Chart of Accounts. The Chart of Accounts is loaded based on the industry that you specified when initially setting up Xero. You may need to edit some account settings and/or create new accounts to make them compatible with the DEAR required accounts. 

  3. Click Add Account.
  4. Fill in the account details according to the account settings listed above (interface may vary slightly depending on the selected country). Make sure to verify that the Tax setting for each account is correct according to your country of business. Consult with your accountant or bookkeeper if you are unsure of which tax setting to use. 
  5. Save your changes and move on to creating the next account. When all required accounts are created, move on to the next section.


Connecting DEAR Inventory and Xero

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Once you have added all the relevant accounts, you can already connect your DEAR account to Xero. If you do not have a DEAR account yet, you will need to complete the DEAR signup process (see My DEAR Subscription) before you can connect DEAR to your Xero account.


There are two ways to connect to Xero when creating a DEAR account:

  • Sign up for a DEAR account using your previously-created Xero account
  • Sign up for DEAR, then select Xero as your accounting system when setting up your DEAR dashboard


Signing Up for DEAR with an Existing Xero Account

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You can sign up for a DEAR Inventory account using your Xero account. Using this method, you can use your Xero account credentials to sign on to DEAR.


Connect to Xero during the setup of your DEAR account:

  1. Click here to go to the DEAR Account Registration page. 
  2. Click the Sign in with Xero button.
  3. Click Allow Access.
  4. Confirm your registration by clicking the link in the email from DEAR.
  5. Set up your DEAR account. The Chart of Accounts and Tax Rules will be imported from Xero. Navigate to Reference Books → Account Mapping to finish mapping your accounts correctly. See More Account Mapping below for further information.
  6. Enter the opening balances from your Xero accounts into DEAR – see Manage Opening Balances for more information. 
  7. Continue to set up your Products, Suppliers, and Customers. Refer to the Getting Started Guide for more help getting set up.

DEAR can only map accounts between systems if they have the same settings. If you are missing an account, you can go back to Xero and create them (check the required account settings above), sync, then reload the Account Mapping page (see below).


Connecting an existing DEAR organisation to Xero

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You can connect an existing DEAR organisation using the Xero Connect Wizard. You can choose to keep or discard existing data.


Connect DEAR Inventory and Xero:

  1. Log on to your DEAR account.
  2. Navigate to Integrations  Xero.
  3. Click Connect to start the Xero Connect Wizard. DEAR is set to keep your data by default. You may select No and choose which data to keep or discard. Transactional data includes sales, purchases, transfers, production orders, etc.
  4. Click Continue. If you are not already logged into Xero, you will be redirected to log in to Xero. You will then be redirected back to DEAR. Click Allow Access to let DEAR Inventory access your Xero data.
  5. Back in the Xero Connect Wizard, on the Mapping page, the mapping of your Xero accounts with DEAR Inventory accounts is displayed. 
  6. The system to match accounts where possible. Select Xero accounts from the dropdown menus in order to match them manually. You must fully map all accounts in order to move on to the next section. 
    • The Connect Wizard will only map accounts between systems if they have the same settings. If you are missing an account, you can use the + button to add a new account to Xero if you are missing one. Alternatively, you can create a new account in Xero and then click Reload accounts from Xero to continue mapping.
  1. Click Continueto move to the Tax Mapping page. You will be able to map your DEAR and Xero tax rules. Click Next to continue when the tax rules are fully mapped. 
    • The Connect Wizard only allows tax rule mapping between Xero and DEAR if the tax rates and Sale/Purchase properties are equal. If DEAR has tax rules that do not have an equivalent in Xero, you will have to create these tax rules in Xero first. Then, click Reload tax rules from Xero to continue mapping.
  1. You will be taken to a confirmation page. Data migration is non-reversible. Type I would like to update all transactions into the text field, then click Confirm to connect DEAR with Xero.


While mapping is ongoing, your DEAR account will be locked and all users, including you, as the master user, will not be able to access DEAR Inventory. After the migration is done, DEAR will send you an email, which will contain a link to the page in DEAR where you can export historical data to Xero. If there is any error during migration, the email will contain information about the error, and you will be asked to contact DEAR Customer Support.


More Account Mapping

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To fully enable all of DEAR's functionality, you can finish mapping the required and optional accounts. Create any missing accounts in Xero if you haven't already, synchronise your data, and navigate to Settings Reference Books Financials Account Mapping. Select the equivalent accounts from the list, then save your changes. 


DEAR can only map accounts between systems if they have the same settings. If you are missing an account, you can go back to Xero and create them (check the required account settings above), sync, then reload the Account Mapping page.


NOTE: You can use DEAR without completing this account mapping. If you attempt to use functions that are linked to an unmapped account, DEAR will report an error and may be unable to complete the operation.


Xero Integration Settings

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Once your DEAR Inventory account is set up, locate the Xero Integration page by navigating to Integration Xero


The Xero Integration page contains the details of DEAR's integration with Xero, explaining the flow of data between the two systems.


Created in Xero, Sent to DEAR

  • Chart of Accounts: Any changes in the Chart of Accounts in Xero will be synced to DEAR. Chart of Accounts is read-only in DEAR.
  • Tax Rules: Tax Rules are created in Xero and synced to DEAR. Changes in either Xero or DEAR are synced both ways. See more information about Tax Rules.
  • Company Addresses


Created in DEAR, Sent to Xero

  • Purchase Credit Notes: Credit Notes authorised in DEAR will be exported to Xero, but will not be allocated against invoices. Credit Notes created in Xero are NOT picked up by DEAR.
  • Purchase Orders: Purchase Orders can be optionally exported to Xero.
  • Credit Memos and Sale Credit Notes: Credit Notes authorised in DEAR will be exported to Xero, but will not be allocated against invoices. Credit Notes created in Xero are NOT picked up by DEAR.
  • Transaction Journal Entries: DEAR will create Manual journals in Xero to reflect COGS and COGS Credit, Assembly, Disassembly, Stock Adjustment, Stock Transfer, Inventory Write-Off and Purchase/Sale manual journals transactions.


Can be created in both, Synced both ways

  • Bill/Sale/Purchase Payments or Refunds: Payments and Refunds may be exported/imported from Xero or synced both ways depending on the configuration setting.
  • Suppliers: Synced with Xero Contacts.
  • Customers: Synced with Xero Contacts.
  • Products/Items: Products, created or updated in DEAR, are always pushed to Xero. Items and modifications to items in Xero can optionally be exported to DEAR.  
  • Bills or Purchase Invoices: Invoices authorised in DEAR will be exported to Xero. Invoices authorised in Xero will be picked up by DEAR (optional).
  • Sale Invoices: Invoices authorised in DEAR will be exported to Xero. Invoices authorised in Xero will be picked up by DEAR (optional). Sale Quotes are not exported. 


Within the Xero Integration page, you can control whether your integration is enabled or disabled, whether payments are pushed to Xero or pulled from Xero, and modify any other integration settings. We recommend taking a look at your settings before putting through new transactions. 


From the Integration Settings screen, set the following options:

  • Xero Invoice Status: When credit notes and invoices (purchase invoices, sale invoices, and consolidated sales) are exported, this option determines what status (draft or authorised) will be set for new Xero invoices/credit notes. This status is then used when the item is exported as a DEAR document.
  • Xero Payments are: Set the direction for payment synchronisation between DEAR and Xero. Payments can be synced both ways (from Xero to DEAR, and from DEAR to Xero) or only in one direction as desired. Note that if this is set to Sync both ways or Pull from Xero, DEAR will not import payments from consolidated invoices. If payments exceed the total invoice amount in Xero, these are not exported. Removing or undoing payments also means re-exporting all payments for the consolidated invoice.
  • Export COGS: Allows you to enable or disable the exporting of cost of goods sold transactions to Xero. COGS transactions are created by DEAR automatically when the Ship stage is authorised on Sale. You can manually void/recall export of these transactions from Xero with the COGS Maintenance tool (see below). 
  • Export purchase orders to Xero: Allows you to enable or disable the exporting of purchase orders to Xero. 
  • Show journals on cash basis reports: When DEAR exports COGS and Manual Journals, this value is added to Xero’s Manual Journal record (ShowOnCashBasisReports property).
  • Treat all Xero Contacts as Customers: If this option is enabled, customers and suppliers from Xero will be created as Customers in DEAR. If disabled, Customers are created as Customers and Suppliers are created as Suppliers. 
  • Category 1 and 2: These are tracking categories. When transactions are exported to Xero, additional tracking information can be included with these transactions (for example, you could add information about Sale Reps, Product Brand or Categories, Customer or Product attributes, etc.). For more details, see Xero - Set up Tracking Categories.
  • Load items from Xero: If this option is enabled, items (products) are loaded from Xero to DEAR.
  • Load Invoices from Xero: Allows you to load purchase and sale invoices from Xero. Invoices are only loaded if they have not been loaded before. Sale invoice numbers must be unique in DEAR. Purchase invoice numbers must be unique for a particular supplier. Enabling this setting makes visible the following options:
    • Auto-receive stock when loading purchase invoices from Xero: Determines if stock receiving is created when a purchase is imported from Xero, or if the purchase will be created without stock receiving, with the stock receiving being done manually. See Processing a Purchase for more information. 
    • Location to be used for purchases and sales loaded from Xero: The default location for sales and purchases imported from Xero.
    • Fulfilment mode when loading sales invoices from Xero: Determines the fulfilment status for imported sales. The following options are available: No Picking, Auto Pick, Auto Pick + Pack, and Auto Pick + Pack + Ship.
  • Export attachments to Xero: Allows you to export sale and purchase attachments (attached documents) to Xero.
    See Xero - Advanced: Export Attachments to Xero for more information on this feature. 
  • Auto-synchronisation: Allows you to enable or disable auto-synchronisation with Xero. Auto-synchronisation automatically starts a sync process. You specify the start date and start time for the first sync, the sync frequency (2, 4, 8, 12, or 24 hours), and how errors (if any) will be reported (email or internal messages).


Consolidating Sales on Export

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Sales can be consolidated and grouped per channel prior to exporting them to Xero. When you select a channel for sales consolidation, instead of individual invoices/credit notes, all invoices/credit notes with the same date, currency, tax inclusive/exclusive indicator, shop name and sales channel will be consolidated into a single daily invoice/credit note. These consolidated documents are then exported to XERO during a manual or automatic synchronisation process with the name format "SO-<Date>-<ShopType>(<ShopName>)-<UniqueNumberForThisDateShopTypeAndShopName>". E.g.: "SO-2019/04/26-Shopify(MyShop)-1".


Configure consolidated sales in DEAR:

  1. Navigate to Integrations  Xero.
  2. On the Xero Integrations page, scroll down to the Consolidated Sales section, and select the channel for which sales are to be consolidated.
  3. Click the View consolidated invoices and credit notes link to open the Consolidated Sales page.
  4. On the Consolidated Sales page, all sales and credit notes in DEAR are displayed together with the corresponding consolidated invoice in Xero.
  5. Look for a specific sales record by typing either of the following items in the Search bar at the top right of the page:
    • the record's document number in DEAR
    • the consolidated number in Xero.
  6. You can click any of the column names on the page to automatically sort the sales records in ascending or descending order. If applicable, click the navigation buttons at the bottom to navigate between pages

NOTES:

  • The period for consolidation is always one day. Payments, Refunds and Customer Credits will be consolidated and added in DEAR.
  • COGS and COGS Credits transactions are consolidated by Effective Date, Debit and Credit Accounts. If any changes are applied in DEAR to COGS or COGS Credit transactions, in Xero all transactions for COGS or COGS Credit are updated for the effective date.
  • Manual journals for all transactions included in the consolidated sales are also automatically created. 
  • Xero payments from consolidated sales will not be imported into DEAR. You will need to process payments manually in DEAR.
  • Void or Undo cannot be performed on consolidated invoices in DEAR since these operations will cause discrepancies in the exported data. You need to create a credit note or invoice to offset the sales to void or undo.
  • Undoing, deleting, or changing a payment in DEAR also deletes the corresponding payment in Xero.


Performing Cost of Goods Sold Maintenance

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IMPORTANT: These features are for maintenance purposes only. Exporting is automatically performed daily.


You can manually export COGS transactions, or void (recall) previous exports, for a specific period using the options in the Cost of Goods Sold Maintenance section. Simply specify the time you want to adjust (the selected dates are included in the period), then click either the Export COGS to Xero or Void COGS in Xero button, depending on the action you're taking.


For consolidated sales, DEAR also consolidates the corresponding COGS transactions.


Connecting to Another Xero Organisation

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If you decide to connect DEAR to a different Xero organisation, click the Change Organisation button. You will be walked through the Xero Connect Wizard to finish account and tax mapping. This is essentially the same process as connecting to Xero for the first time. 


See Switching Accounting Integrations and Xero Connect Wizard for more information. 


Disabling Your Xero Integration

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To remove the integration between DEAR and Xero permanently, click the Disable Integration button.


Exporting Data from DEAR to Xero

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You can export historical data from DEAR to Xero, which registers all documents and related items (products, vendors, customers, etc.). You might use this feature if you want to export all data to Xero for a particular date range. Select a start date and then click the Export Historical Data button.


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