Creating your bill of materials on Xero: is it possible?

There isn’t a feature for saving bill of materials on Xero. In this article, we look at the workarounds and 3rd party apps, manufacturers can use to get BOMs.

Saving your bill of materials on Xero, is it possible, or is it just a pipe dream?
Last updated: 02.11.2022

Saving your bill of materials on Xero, is it possible, or is it just a pipe dream? In this article, we tackle these questions, looking into Xero, the workarounds for saving your Xero bill of materials, and the third-party solutions.

Does Xero have a bill of materials?

There is no bill of materials on Xero, meaning that there isn’t a module to save your bill of materials (BOMs) onto Xero.

Slow down, don’t go logging onto your accounts and unsubscribing from Xero just yet, as there is hope.

Even though it is true that you’re unable to save your bill of materials on Xero, it does have an impressive App Store that allows you to search for third-party integrations by simply typing: bill of material into the search bar.

Alternatively, if you don’t wish to integrate a third-party solution for your bill of materials, some workarounds can (technically) allow you to save and even track a basic Xero bill of materials structure within the software.

That’s why we’ve put together this article, exploring everything you need to know about saving your bill of materials on Xero, from the workarounds to the third-party solutions available for direct-to-consumer (D2C) manufacturers.

But, first things first, exactly what is a bill of materials and why is it so important for manufacturers to have it already setup?

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What is a bill of material?

It’s technically not possible to have bill of materials Xero, but there are workarounds you can use.

bill of materials, often referred to as just BOMs or a product recipe, is a list of the raw materials, sub-assemblies, parts, components, and the quantities each product will need during production.

You can think of a BOM as your product’s DNA.

However, a BOM doesn’t stop there, as it also details the operations (and the number of times) a product will need to go through routing manufacturing until it becomes a finished product. Getting your BOMs sorted is an essential element to running an efficient factory floor.

Getting your BOMs sorted is an essential element to running an efficient factory floor. This is why it’s important to know about them before you start looking into your bill of materials on Xero.

Now, when it comes to designing your Xero bill of materials, how in-depth you want to go is extremely limited (we’ll look into this in the next chapter), as the complexity of building some products consume more resources than others.

Take assemble to order products like a bicycle and a computer. A bicycle could be realistically built with only a few subassemblies and in a few steps.

But a computer? You have the electronic bits, cases, and sensitive hardware, you’ll need to smolder, assemble, and follow many more steps and consume more materials before you’re finished.

Not the most elegant example, but the point is a BOM for one product could be simple, while another BOM could be complex. Your products BOM will fall under one of three types:

PRO TIP: As you can see, following your bill of materials on Xero will depend on your raw material levels. That’s why it’s important to brush up on your raw material inventory management to optimize how you build your products.

Bill of materials on Xero

Xero bill of materials doesn’t have to be an unachievable dream, follow these workarounds to obtain them.

Does Xero have a bill of materials functionality? Unfortunately, there isn’t an option for saving your bill of materials on Xero.

At least there isn’t a feature built into Xero that will allow you to do this.

We’ve already mentioned that there are workarounds to saving your Xero bill of materials. For the purposes of our explanation, we are only going to be looking at a Xero bill of materials solution for certain manufacturers, like bike manufacturers, for example.

Xero inventory management boils down to two categories:

  • Tracked inventory
  • Untracked inventory

Your tracked inventory will consist of your finished goods, and Xero will track those stock levels.

Your untracked inventory is your fiddly bits, the raw materials. You can track the costs of your raw materials, but this isn’t done automatically. And you can never see your actual stock levels for untracked inventory in Xero.

However, the workaround we’re about to show you not only helps you track your raw materials but also gives you a basic bill of materials on Xero.

Pro tip: You’re already probably realizing how complicated it is to manage your Xero bill of materials and inventory. That’s why many manufacturers turn to Xero manufacturing software to help them get more control over these areas.

The bill of materials Xero workaround

Does Xero have bill of materials? No, though you can design a very basic BOM structure.

Workaround #1

First things first, this method works better for those who follow a make to order workflow. It doesn’t mean you can’t use it if you don’t follow this method, it just means you’ll need to take regular stock takes of your inventory.

For this example, we’ll assume the role of a bicycle manufacturer.

So, how to get a simple Xero bill of materials:

1. Log into Xero and at the dashboard, select “Business” and “Products and Services”

Though it's not possible for bill of materials on Xero, you make a very simplistic structure.

2. Select “+ New Item” and, one by one, add the materials needed for building your product. In this case, it will be:

— Bicycle Frame;

— Bicycle Gear; and

— Bicycle wheel. 

Make sure to check that you track this inventory.

Bill of materials Xero can be saved and tracked, but only if the product being manufactured isn’t complicated.

3. Once you’ve input all your raw materials and components, next comes adding that actual finished product.

You’ll go through the same process, but instead, you’ll list this as an untracked version.

Xero bill of materials is better saved and tracked with third-party tools.

The idea is that you’ll sell the finished good to customers (which will have no stock levels) and you’ll track your raw materials in Xero instead. Once you make a sale, simply generate an invoice using your raw materials to track the manufacturing costs.

But either way, you will now (technically) have a simple bill of materials on Xero.

Does Xero have bill of materials? No, but there are plenty of solutions for manufacturers available on the market.

For the more visual learners among us, you can check out the video below on how to set up your bill of materials on Xero:

Workaround #2 

Okay, it might be disingenuous to refer to this as a workaround, but if the workaround of using a basic bill of materials on Xero isn’t an option, you could simply manage your BOMs and raw material elsewhere.

We’ve put together a free manufacturing spreadsheet template for those looking to get more control over their inventory and Xero bill of materials.

Otherwise, your best solution for the Xero bill of materials issues, and this is what Xero themselves recommend, is to look into a third-party app.

Bill of materials Xero: third-party solutions

Bill of materials on Xero might not be possible, but you can certainly use a third-party solution to be able to manage your BOMs.

As we’ve already explained throughout this article when it comes to if Xero has a bill of materials functionality, it’s a nope.

Maybe you can use a workaround or find a way to cope with inefficient Excel spreadsheets, but you’re going to be dedicating resources to manually updating stock levels when these resources could be focused on your manufacturing or growing your business instead.

Ultimately, the purpose of Xero is to optimize your bookkeeping, and the software does a fantastic job of doing that.

But why Xero recommends integrating third-party software is because it’s a far easier solution to bridging the gap between missing features on Xero such as:

You can even integrate your sales channels, to create synergy between your different platforms, which is quickly becoming the winning D2C formula for manufacturers:

E-commerce Platform + Smart Manufacturing Software + Xero = Success!

Katana smart manufacturing software

Bill of materials Xero x Katana is a quick and inexpensive fix to this problem.

Katana Smart Manufacturing Software is built for manufacturers by manufacturers, which integrates with your Xero account and gives you a powerful Xero bill of materials feature for managing your product recipes.

Once you integrate your Xero x Katana, you can start making specific BOMs for all of your products and their product variants (Katana will automatically generate each possible variation to save you time).

Within these BOMs you can add your raw materials and subassemblies, and based on these BOMs, Katana will automatically:

  • Make inventory adjustments
  • Calculate manufacturing costs
  • Check material availability for manufacturing orders

Not only will Smart Manufacturing Software provide a solution to the missing features for bill of materials on Xero, but you’ll also have access to:

The Auto-Booking Engine       

You open up your spreadsheet or go into your inventory, always wondering if you have enough stock to satisfy your orders. Katana’s unique auto-booking engine removes that dread by automatically allocating available materials and finished goods to open orders, in real-time, so you know immediately the soonest you can finish your orders.

Priority Based Planning    

Scheduling can be a real pain, especially when you know that anything could happen that’ll need you to reschedule production again. Katana has a nifty drag-and-drop feature, so you can easily rearrange your workflow. But, best of all, the auto-booking engine will reallocate your raw materials to fit with the new schedule.

Katana gives you priority-based planning and Xero bill of materials.

An Overview of Your Floor-Level Progress   

By only handling your manufacturing via Xero, you’re still going to need to figure out a way to monitor your production. Katana gives you and your team members a way to track the progress of:

  • Manufacturing orders
  • Individual jobs

All from one, ridiculously easy-to-read, visual dashboard. For a better understanding, be sure to check out the video below:

How to implement Xero x Katana

Does Xero have bill of materials? No, not built into the software anyway.

Getting implemented and set up your Xero bill of materials is pretty straight forward:

1. Go to Katana’s website and get yourself set up with the 14-day free trial.

Does Xero have bill of materials? No, not built into the software anyway.

2. Once you have logged in, you can head over to the “Settings” screen, and select “Integrations” to connect Katana to your Xero account.

Bill of materials on Xero is made way less complicated if you use another tool to save them.

3. Once you’ve selected which account you would like to integrate, you can start editing how invoices and bills from Katana will appear in Xero.

At this stage, you’ll be able to import your customer and supplier information from Xero to Katana.

Bill of materials Xero might be non-existent, but you can easily get BOMs with a third-party integration.

And that’s it! You’re now ready to set up your Xero bill of materials and take full advantage of the power of smart manufacturing.

For a more visual demonstration of implementing Smart Manufacturing Software with Xero, be sure to check out the video below:

Alternatively, if the status of your invoices and quotes is what triggers your manufacturing orders in your current workflow, then we’d recommend checking out Zapier, which allows you to manage your Xero sales orders in Katana.


Xero bill of materials isn’t so much of a pipe dream once you get set up with the right tools for the job.

There you have it, you now know the answer to does Xero have bill of materials. But once again for the people at the back, when it comes to Xero bill of materials functionalities, you could say it has… Zero!

Yes, it’s a dad joke and we’re not ashamed.

It doesn’t mean the software isn’t without merit. Xero is fantastic at helping you keep track of your finances, and that’s exactly what you should use Xero for.

But, since there’s no option to save your bill of materials on Xero, your best bet would be to get set up with a third-party solution that can help get control over your:

Katana offers you a 14-day free trial, so you can see for yourself how you can optimize your manufacturing processes once you integrate it with your Xero account.

We hope you found this article useful, if you have any questions, please do not hesitate to get in touch with us.

And until next time, happy manufacturing.

Katana ERP

Katana Team

Katana gives thousands of manufacturers a live look at their business. Manage all the moving parts of your business and unite the apps and services you use in one visual platform.

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