How inventory in Xero works with Projects

Create inventory items in Xero for tasks and expenses you'll regularly use with Projects. Then when you create a tasks & expenses invoice from a project, Xero automatically adds the account codes and tax information associated with each inventory item.

About inventory and Projects

  • If you regularly use tasks or expenses in projects, set them up as inventory items in Xero to speed up data entry, and improve the accuracy of invoices created from Projects.
  • You can't create a new inventory item directly from a task or an expense. You'll need to create the untracked or tracked inventory item first, then assign it to your project.
  • When creating the inventory item, you must select the option I sell this item to be able to assign it to a project.
  • Use untracked inventory items for common activities you'll add as tasks on a project.
  • Use either tracked inventory or untracked inventory items for costs you'll add as expenses on a project. Learn more about when to use tracked or untracked inventory items in Xero.
If you add a tracked inventory item to a project, the quantity on hand does not change until it is invoiced. To keep an accurate record of the quantity on hand, create a tasks & expenses invoice as soon as you add the item to the project.

Add an inventory item to a task or expense on a project

  1. Either add a task or add an expense to the project you want to add the inventory item to.

  2. Start typing the name of the inventory item in the Task name or Expense name field, then select the item from the list.

    Image of selecting an inventory item from a drop down.

  3. Fill in the rest of the fields.

  4. (Optional) Rename the task or expense, or update the unit cost or unit price to customise it for the project.

  5. Click Save & add another to add another task or expense, or Save if you are done.

If you rename the task or expense, or update the unit cost or unit price, it won't update the inventory item recorded in Xero. To update the item itself, you'll need to edit the item in inventory.