Xero Order Management: Take Control of Orders Today

Order management made easy with Xero integrations. Find out how to optimize your processes and workflow for success.

Worker managing orders and packaging goods into a parcel.
Last updated: 17.08.2022

Xero order management needs the support of third-party solutions, something which Xero themselves even recommends. But, why is it important to have efficient order management, and what’s the best software for helping manufacturers achieve this?

Xero is a fantastic accounting tool for helping you keep on top of your bookkeeping, used by all types of businesses, such as large-scale wholesalers and direct-to-consumer (D2C) manufacturers.

And for good reason, not only is it an inexpensive solution for managing those dreaded finances, but it also comes equipped with:

  • Basic Xero inventory management     
  • A mobile app
  • Document storage (for sending customers your Terms and Conditions, for example)    

However, when it comes to Xero order management, the software is lacking features needed by manufacturers, such as generating an invoice for the customer and setting it aside to send later.

For manufacturers, the rate at which you’ll fulfill a Xero sales order will be different every time, due to several factors, and that’s why many (by the advice of Xero themselves) turn to the Xero Appstore for a solution to getting more control over their Xero order management.

In this article, we’re going to look into Xero order management, and how Katana Smart Manufacturing Software is the perfect solution for manufacturers looking for Xero sales orders.

Get a live look at your orders. Xero users integrate their platform with Katana to get more control over their sales and manufacturing orders. Upgrade your manufacturing processes with a 14-day free trial.

But, to begin our journey into Xero order management, what exactly is order management?

What is order management?   

Order management, in layman’s terms, is all about how you track orders and how you manage your team and processes to fulfill those orders.

But, not only does that mean managing the order, but it also means managing the data surrounding the customer too, such as:

  • What does their order history look like     
  • Do they pay on time
  • Are they a VIP customer   

Simple right? Unfortunately, Xero order management is missing features for manufacturers tracking orders, mostly because Xero is for tracking your finances, and not for monitoring complex manufacturing processes.

Does Xero accounting do sales order confirmation? 

Skateboard manufacturer stood at workstation enjoying a drink while managing orders on a laptop.

In short, does Xero accounting do sales order confirmation? Yes.

But the issue is, when you confirm a Xero sales order, it automatically generates an invoice for the customer. And here lies the problem, especially for manufacturers.

A manufacturer’s order fulfillment cycle changes often, especially for those who’re using a make-to-order workflow or bespoke manufacturing.

And when it comes to Xero order management, it pretty much only goes as far as was a quote accepted, or not.

There’s a definite gap in the Xero sales order functionality. However, manufacturers have found a workaround for using quotes in Xero.

Instead, what they do is change the title of a Quote to Sales Order, send that over to the customer, and once they accept it, convert it to a Sales Invoice.

Though, this solution isn’t foolproof, as it’s easy to forget to make that conversion.


PRO TIP: Looking to take your Shopify to the next level? No problem! Learn how to optimize production by:  

The benefits of using Xero order management integrations

Glasses manufacturer looking for material on a shelf while holding a tablet with Xero order management software.

To improve your Xero order management you’ll need to connect with software, such as Katana, with Xero integrations, that’s going to give you benefits such as:

1. Improving your inventory management 

Using Xero order management without Integrations isn’t going to cut it, mainly because manufacturers need to not only manage finished goods but also need to focus on raw material inventory management and work-in-progress (WIP) inventory.

Katana’s Xero order management integration is going to give you the tools to monitor, in real-time, your inventory movements.

Its tools will be crucial for increasing your inventory turnover ratio, so you can avoid stocking too much inventory or running out.

Allowing you to save capital from efficiently using storage space, keeping customers happy by avoiding stockouts, and even implement lean inventory techniques into your business.

2. Making fewer mistakes while fulfilling orders     

We’ve already highlighted how easy it is for someone to make a mistake when doing their Xero order management manually.

This way of working might be okay in the early stages of your business, but when you’re getting one Xero sales order after the other, you can be quickly overwhelmed by the increased volume.

Only made more complicated when managing multiple sales channels and process steps when manufacturing, the more you need to do increases the opportunity for a mistake to occur along your manufacturing route.

Doing your Xero order management with Katana is going to allow you to automate these processes, so you can easily track the progress of your products from receiving the Xero sales order, right up until you dispatch it to the customer.

3. Having reliable information in real-time    

Continuing from the previous point, by taking advantage of Katana’s Xero order management integrations, you’ll be able to centralize all your tools, giving you synergized, accurate, and up to date information in real-time.

This information allows you to be proactive about any problems that might occur within your Xero order management processes.

This could be as simple as improving your bottleneck management to identify problems along your manufacturing route, or uncovering any dead stock within your inventory.

To put it simply, you’ll be able to make better decisions on important business matters with your improved analytics.

4. Less time-wasting

Using manufacturing process automation with Katana’s Xero order management integration is going to allow you to free up time and resources.

This will save you from having to manually update information or switch between different apps or tools.  We mentioned earlier that your order management is an ecosystem, and the purpose of Katana’s Xero integration is to create a link between all your different channels and tools, which for many is the winning formula for D2C manufacturers:

E-commerce Platform + Katana + Xero = Success!

Katana's Xero integration helps you easily integrate your accounting, inventory, production, and sales. Find out how.

So, these are the benefits of using a Xero order management integration to get a better handle of your sales and purchase requisition in Xero.

But the real question is, what’s the best order management system for the job?

PRO TIP: You can find some Xero inventory add-ons in the app store, that has been specifically built for manufacturers trying to get more control over their order management.

Smart ERP manufacturing software for Xero order management

Skateboard manufacturing stood at workstation updating information on laptop with Katana manufacturing ERP software.

Smart manufacturing is the process of interlinking all your tools, and software, to create a smooth Xero order management flow.

So, let’s say you use Shopify for sales and Xero for everything else. As it stands, you’ll be handling your sales in your e-commerce platform, your manufacturing offline, and then logging into Xero to sort out your finances.

You probably get dizzy having to be on and off the computer like this.

Katana Smart Manufacturing Software integrates with your favorite e-commerce platforms and Xero, to create a smooth workflow between your sales, production, and financing, all from one platform.

But, not only that, by upgrading your Xero order management, you’ll get access to:

1. Automated processes       

You get your Xero sales order, from here you have to plan production, check inventory, save the invoice as a draft (remember to update it later), manufacture the goods, dispatch the products, and perform a stocktake.

That’s a lot of work!

With automated processes, you can perform most of these actions quickly and get straight back to manufacturing.

Katana uses an auto-booking system, so as soon as a sales order comes in, Katana will automatically:

  • Allocate available inventory to the order     
  • Perform manufacturing cost calculations
  • Calculate the deadline
  • Schedule production

2. Automatic production planning    

Without a Xero sales order integration, when you receive an order and need to make a product, you’re going to need to figure out a way to schedule production.

And once that difficult task is complete, it only takes one hiccup for production to stop and for you to have to go back to the drawing board.

Katana automatically schedules production in the order they are created, so you don’t have to stress about figuring out your production flow. However, should a hiccup arise, Katana uses a nifty drag-and-drop system, so you can easily reconfigure your production flow.

Best of all, the auto-booking system will automatically redistribute your inventory to fit the new schedule.

Katana priority-based production planning.

3. The option to send bills and invoices when you need to       

Finally, Xero can be over eager with generating invoices, when you might need to hold onto them for a little longer.

With Katana, you can choose when to create an invoice or a bill for your purchase requisition, and send them straight to Xero, avoiding any confusion from using the workaround mentioned earlier in the article.

Screenshot of Katana manufacturing ERP software showing how to create invoices.

How to integrate Katana with Your Xero order management

Worker labelling finished goods of cosmetic creams near a laptop showing the status of Xero orders.

Optimizing your Xero order management couldn’t be simpler with the Katana integrations.

Follow these steps below to get effective order management:

Step 1 – Sign up to Katana with our 14-day free trial.

Screenshot of the Katana sign up page.

Step 2 – Head over to the “Settings” screen and under “Integrations” go ahead and connect your Xero account.

Screenshot of the Integrations window on in Katana manufacturing ERP.

Step 3 – Select which businesses you wish to integrate with Katana.

Screenshot of Katana and Xero integration detailing the data import process.

Step 4 – You can now start configuring your accounts, starting with how you would like bills and invoices to be sent from Katana to Xero.

Katana screenshot. Configuration window for integrating Katana and Xero.

Step 5 – Here, you can assign where you want to save your product income and material expenses in Xero.

Katana screenshot. Configuration window for editing where information is imported in Xero.

Step 6 – Define your tax rates.

Katana screenshot. Editing Xero tax rates.

Step 7 – Finally, choose if you would like to import your customers and supplier’s information from Xero to Katana.

Katana screenshot. Confirming data import.

And that’s it! You’re now fully set up to start taking advantage of automated Xero order management.

Check out the video below if you’d like a guide you can follow when integrating Katana to Xero:

PRO TIP: Katana’s native Xero integration is great for tracking revenue and costs. For manufacturers who start their production based on the status of their Xero invoices and quotes, we recommend checking out the Zapier integration for handling Xero sales imports.

We hope that you found this useful, but to reiterate, Xero themselves recommend using third-party solutions to improve your Xero order management.

And regardless of how you go about doing it, you can use the following questions to help you determine if the software you’re looking at is perfect for you:

  • Does the solution integrate with Xero      
  • Does it support sales and manufacturing orders  
  • Can it perform manufacturing cost calculations  
  • Can it help you manage raw material inventory 
  • Does it support a production schedule  
  • Does it give you an overview of your order fulfillment
  • Can it integrate with your e-commerce platform 

And until next time, happy manufacturing!

Katana ERP

Katana Team

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