Purchase orders created in vintrace, when synced, raise an accounts payable invoice (Bill) in Xero. This allows you to manage the payment for that bill from within Xero itself. Vendor information is also sent across to Xero when the invoice is created so the vendor does not need to pre-exist in Xero.
Important tip: A purchase order with a New status will be created as a Draft invoice in Xero. Use the Approved status to ensure the invoice is created as an approved (awaiting payment) invoice in Xero.
It is important to ensure you have appropriate Asset or Expense accounts configured in vintrace and have these linked to Xero. Accounts, in vintrace, are configured under Winery Setup – Accounts. The Accounts in vintrace can then be linked to particular items you purchase.
Important tip: When setting up your Accounts for items you purchase it’s important to consider the impact of the Direct versus Indirect costing method. The Direct method will seek to capitalise the value of this account to your bulk wine work in progress account when items purchased and linked to this account are used in production. In practice this results in a journal being created from the asset account to the bulk wine work in progress account as the items (chemicals, dry goods etc) linked to that account are used in production. The Accounts Sync option is responsible for that. The Indirect method will not capitalise any of these items when used in production. The Indirect method is typically best for items you wish to just expense. if you wish to allocate these expenses at a later date you can do so via the Cost Allocation console. Read more here about Direct versus Indirect.
In the example below, we have setup our Asset accounts and linked a stock item to this.
These Asset/Expense accounts can be defaulted against the individual items you purchase or against the Stock Category that you set for the items.
Create a purchase order in vintrace from Winery Setup – Procurement – Purchase Order.
Creating a purchase order in vintrace and then syncing the purchase order to Xero will create an invoice in Xero with the selected Asset account and line items. You will need to select the Sync to Xero checkbox before using the Save button for the invoice to be created. You can ensure this option is always selected by using the ‘heart’ icon to remember it as default.
To view the invoice in Xero, use the View in accounts link on a vintrace purchase order once it has been saved and synced.
This will take you to the invoice in Xero
This invoice can now be managed from within Xero for payment processing.
As an alternative example, let’s look at the setup of a chemical we just expense.
In the example below, we have linked the “Sulfur dioxide” additive stock item to the “Chemical Additions” expense account.