Upgrade your workflows with a Xero barcode inventory system

Xero doesn’t support barcodes for inventory, but you can get this feature with the help of a third-party app. Learn more about the benefits of Xero barcode inventory and how to set it up.

Female manufacturer using Xero barcode scanning on inventory.
Last updated: 27.03.2023

Xero is a fantastic platform for manufacturers looking for inventory management and accounting tools. Especially since manufacturers need to cover both areas, it seems totally logical to get set up with Xero to help you manage these tasks.

Though, if you’re a scaling manufacturer, you’re probably starting to see the limitations beginning to rear its head. Many manufacturers reaching this stage start to ask themselves this question, “Is there a way to get a Xero inventory barcode system?”

If you’re in this position, you’ll be glad to know that we answer this very question. In this article, we look into Xero barcodes, why they’re important, how to implement them, and the best tools for the job.

Automate your inventory. Thousands of manufacturers use Katana manufacturing ERP to simplify their stocktaking, save them time, and avoid errors with barcode scanning. Start scanning today with a free 14-day trial.

Man in warehouse using barcode scanner for Xero.

Introducing Xero Inventory Barcode Management into Your Business

First things first, barcodes are machine-readable visual bars alternating between black and white spaces of various widths translated into digestible data for the person scanning this barcode.

In simpler terms, scanning a barcode will give you information like:

  • Price of the items
  • Inventory location, including the origin
  • Supplier details and more information

Barcodes can contain more information, but that depends on what information you want to store and the type of barcode you use, as barcodes come in two different forms:

  • 1-dimensional barcodes (1D)
  • 2-dimensional barcodes (2D)

The major difference between the two is the amount of data stored on them and how they function. The easiest way to remember the difference is to think of 2D barcodes like QR codes. If you want to read more about the functions and different types of barcodes, we have covered barcodes in great detail here – Barcode Inventory Control: Ultimate Guide for Manufacturers.

Now we’ve got the basic principles of barcodes out of the way. We can look at introducing Xero inventory barcodes into your manufacturing process because, as you’re probably already aware, Xero does not come with a barcode scanning feature.

Many manufacturers who want to get started with a Xero inventory barcode system turn to a Xero inventory add-on to help implement them into their workflow. But are barcodes necessary for you? Well, that depends on how you intend to utilize them throughout your business. So, why exactly is it important to implement Xero inventory management with a barcode in your manufacturing?

Male using a calculator and mobile phone at a table covered in paper charts to update Xero books

Why is it important to use barcodes in your business?

Managing your inventory and monitoring equipment moving around your business can prove to be quite the challenge. Without a Xero inventory barcode system in place, orders can go unfulfilled, and items can quickly go missing or even stolen.

Your business’ growth will only exacerbate these problems, and before you know it, your profit margins have taken a hit due to the chaos of manual inventory and asset tracking. Though it doesn’t all have to be a slog. Simply taking advantage of modernized barcode inventory software can help you vastly improve your inventory and asset management.

Handling inventory with spreadsheets can lead to you and your employees inputting errors and damaging your business. While on the other hand, a Xero inventory barcode system can significantly reduce those errors. According to one study, a computer has an error rate of one in every 36 trillion characters instead of one in every 300 characters while inputting data manually.

This ultimately highlights the greatest importance of getting a Xero barcode integration since you’ll be significantly increasing the speed you receive inventory, fulfill sales, all the while greatly reducing the chance of making a mistake.

So, if implementing a Xero barcode inventory system is important, just how exactly can they be implemented into a manufacturer’s day-to-day workflow?

Workers using Xero barcode scanners and tablets to update inventory on a conveyor assembly line.

How to use barcodes in your business?

Now you understand the importance of Xero barcodes, how can you use them as a manufacturer?

Well, there’s the obvious, which you see every time you go to a retailer and purchase something. The cashier uses a scanner to get the price and automatically reduces the inventory amount on hand. But here are just some of the other instances in which having barcodes implemented will be invaluable:

Monitoring stock levels

From your raw materials to finished goods, using a Xero inventory barcode management system will allow you to generate barcodes, export them to your labeling software, and print them off for your items.

This will help you improve your inventory control by updating stock levels in real-time when you receive or use raw materials and sell finished goods to a customer.

Tracking equipment internally

Do you have items that travel from place to place? For example, perhaps you have company laptops that get passed between employees, or maybe you have a remote working policy due to the COVID-19 pandemic?

Just like when tracking your inventory, you too could use a barcode for tracking company assets to avoid them becoming lost or stolen.

Tracking batches

Is your business following a batch manufacturing workflow? What happens if a batch is compromised and you need to do a product recall? How can you possibly do it without the appropriate systems in place? A Xero barcode integration gives you the tools to track items and batches from the moment materials are received and leave your shop floor as a finished good.

NOTE: Depending on your business, for example, those in food production, having systems in place for product recalls could be a legal requirement.

Simplifying sales process

According to Brigade Group, 50% of new salespeople never reach their quotas. The best way to improve these metrics is to simplify the sales process. A customer buys an item, in person or online, and all you have to do is scan the item to reduce the amount of on-hand inventory, get all the relevant information like price, and that’s it. Everything is updated immediately in real-time.

Two accountants with laptops and spreadsheets balancing their books.

Benefits of using a Xero barcode inventory system in manufacturing

Once you’ve found a Xero barcode inventory software for your business, these are the following benefits that you can expect to see once implemented into your business:

1. Reduce human error

We touched upon this earlier. But, we can’t stress enough just how much of a difference barcodes will make in your business, especially considering that machines were the clear-cut winner when it came to man vs. Machine. Manually entered data leads to mistakes, while Xero barcode scanning is quick, efficient, and accurate.

2. Low-cost implementation

A Xero barcode integration gives you great value for your money as you’ll be significantly reducing the time it takes to complete tasks and with fewer people, allowing you to refocus your resources to more critical tasks easily. Plus, barcode labels are simple to design, print, and cheap to mass produce too.

3. Reduce employee training time

Along with the reduced costs, you can also reduce the amount of time it takes to train employees since training them to use a handheld barcode scanner can take minutes instead of hours to get them set up on a system that requires manual adjustment.

4. Barcodes are versatile

As already mentioned, implementing barcodes within your business allows you to collect almost any type of data you want to save. However, barcodes can also be attached to most surfaces, meaning you can use them for:

  • Tracking products across your supply chain
  • Outgoing shipments already dispatched to customers
  • Assets and equipment in and outside of your business

5. Improved inventory control

Xero barcode inventory system helps you greatly improve your inventory control. All of this will help you reduce manufacturing overheads and lower carrying costs by better understanding your inventory movements.

6. Improved analytics and real-time data gathering

The real-time overview of your products and the fact that you can store the data you need to collect means you can get fast and reliable information whenever you need it. You can then use it to implement better pricing strategies or better streamline your inventory.

8. Improved business decisions

As you have probably already gathered, Xero barcodes will improve a whole bunch of KPIs, such as efficiency, speed, and accuracy.

All these improvements combine into providing you with the power to make quicker and more informed business decisions, saving you time and money using the data you’ve quickly obtained from your Xero barcode system for inventory.

So, now you know the importance and benefits of using a Xero barcode inventory system, where can you find a system built for manufacturers using Xero?

Katana + Xero — the ultimate combination for manufacturers

A simple yet powerful barcode scanning integration for manufacturers looking for improved inventory control and scalability.
Raw material inventory, organic granulated cane sugar, in a stockroom.

Using Katana for the Xero inventory barcode system

Katana ERP manufacturing system supports manufacturers who handle sales orders, manufacturing orders and need to monitor items on the shop floor and beyond. It also comes equipped with integration functionalities so that you can synchronize and manage your manufacturing alongside your favorite e-commerce and accounting software like Xero.

Katana Xero barcode management features allow you to:

  • Assign barcode numbers to inventory items
  • See and track your barcode number within the Katana platform
  • Identify inventory with barcodes and more

What this means for you is along with getting established with barcode software, you’ll also get access to a ton of other features that are essential for manufacturers, such as:

  • Finished goods and raw material availability tracking
  • Bill of materials — otherwise known as product recipes storage
  • Simple yet powerful click-and-drag priority-based production planning
  • Multichannel sales support
  • Shop floor level control
Man with headphones packaging coffee beans on a shop floor.

Install Xero barcodes with Katana in 3 simple steps

You’ll be glad to know that getting set up with Xero barcodes in Katana is very straightforward.

Follow these three steps, and you’ll be well on your way to managing barcodes with Katana:

Step 1

Log in or sign up to Katana.

Step 2

Once you’ve logged in, you’ll notice some tabs at the top of the platform. Select Settings and then Integrations to begin the sync between Katana and Xero.

Step 3

Follow the pop-ups and configure the Xero integration. As soon as you’re done, click Continue, and congratulations, you’ve finished integrating Katana x Xero. To enable barcodes, head back to Settings to switch on barcodes.

Are you a visual learner? Check out the video below to follow the step-by-step guide to getting fully set up with the Xero barcode inventory system:

Boxes on conveyor being scanned by worker on assembly line.

Optimize your workflows with Xero barcodes

Xero inventory barcode is essential for manufacturers looking to improve how their inventory is managed and overhaul their tracking capabilities, as it may even be a legal requirement for your business.

Improve the management of your inventory and create a smooth workflow from sales to manufacturing and accounting with Katana manufacturing ERP’s 14-day free trial — no credit cards. No hassle.

Not only will you reap the benefits of setting up a Xero inventory barcode system into your business, but you can also take advantage of the:


Connect any of your favorite tools and bridge the gap between your manufacturing and other areas of your business with a Xero ERP integration.

Shop Floor App

Katana gives business owners and managers an entire overview of their production. All the while, Katana’s Shop Floor Control allows employees to be assigned tasks, make status updates, and take responsibility for their tasks and others on the shop floor in real time.


If we haven’t yet built the integration natively, or you can’t find a template on Zapier, then no worries. Katana allows employees to be assigned tasks, make status updates, and take responsibility for their tasks and others on the shop floor in real time.

So, there you have it, everything you need to know about managing Xero inventory and the perfect tool for the job. If you have any questions or want to know more about Xero inventory barcodes within Katana, please drop us a message at any time.

And until next time, happy scanning.

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James Humphreys

Senior Content Manager

James Humphreys has a background in creative writing and has been writing about the manufacturing industry for 3+ years.

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