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Xero Inventory Management vs TradeGecko Inventory Software

In the first in a series of guest posts by Heather Smith, author of ‘Xero for Dummies’, we asked Heather to reflect on the introduction of the Tracked Inventory feature in Xero, and what it means to TradeGecko customers. Here at TradeGecko we welcome Xero’s feature release and believe TradeGecko's Xero inventory management integration will continue to be a crucial component of your businesses' operations.

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Like many in the Xero community, I was thrilled to hear of the launch of Tracked Inventory in Xero. Xero has always offered limited stock-recording functionality, but the new Tracked Inventory feature records both the quantity and value of inventory on hand. For businesses that require a simple inventory solution, Xero should now meet their needs.

"With Xero delivering inventory, most businesses in the world now can be more productive with cloud software," said Rod Drury, CEO, Xero. "Today we've not only matched most of the features of traditional desktop software, but taken it beyond in terms of ease-of-use, mobility, value and performance."

source: Xero media release

This milestone release made me wonder about the future of Xero add-on inventory solutions. Do they still have something to offer the Xero community? Do they still have a business? Or have they stocked up their freezer with Ben & Jerry’s ice cream in preparation for the day tumbleweeds roll through their office?

I think there’s definitely still a place for inventory add-ons in the Xero ecosystem. Let me explain why that ice cream can stay in the freezer — and why I predict the release of Xero’s Tracked Inventory feature will lead to an increased uptake of add-on inventory solutions.

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Xero now offers two inventory reports, one of which includes Tracked Inventory. That report, the Inventory Item Details report, includes fourteen customisable columns of information.

Contrast this with TradeGecko, which has nine customisable specialist inventory reports, including:

  1. Inventory stock on hand
  2. Inventory detail 
  3. Location report 
  4. Reorder report
  5. Income stock report 
  6. Historical stock report (beta)
  7. Sales by time period 
  8. Sales by company/product/variant/channel/assignee
  9. Sales history report

Businesses that need to access current details about their inventory to manage their operations, benefit from the extensive range of in-depth reports that specialised add-on platforms like TradeGecko offers. With this insight, you can effectively and efficiently manage your inventory, optimize your operations and glean insights that can assist you in making strategic, high-level decisions For example, looking at your ‘Sales by time period’ report will easily help you to identify seasonal dips and or month-end spikes in demand, and using this information, you’ll be able to make more accurate forecasts and adjust stock levels accordingly. Looking at your ‘Sales by channel’ report and filtering out the bestsellers for each channel, on the other hand, will allow you to better understand the different audiences that each channel brings, and to perhaps come up with channel-specific promotions and bundles that can help to increase revenue.

Note: You would look to Xero’s Profit and Loss and Balance Sheet reports to see a complete picture of the business’s financial position. This insight would not typically be available in any inventory add-on solution.

Inventory Item information

With the introduction of Tracked Inventory in Xero, businesses can easily access plenty of extra inventory management information, including Quantity on Hand, Average Cost, Total Value, In Committed Quotes and Quantity on Order.

In addition to Xero’s Inventory Item information, TradeGecko has an extra seven fields available:

  • Barcode 
  • Supplier code 
  • Volume (e.g. 500 ml) 
  • Price level options
  • Images
  • Indicators around (1) whether it's available for sale and (2) whether you can keep selling below zero stock levels

Being able to record and access extra information about inventory helps you attract and keep repeat customers, because you’re in a better position to meet their demands.

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Pricing level options

Part of a business's marketing and pricing strategy is to offer different pricing levels to customers, based on the price elasticity of their demand, as well as their willingness to pay. This can be achieved within Xero by creating a duplicate item for each price level and changing the selling price. However, it could make tracking inventory value and quantity slightly more complex.

With TradeGecko there are three default price levels available: wholesale, buy and retail, plus the option to add an unlimited number of price levels. Each customer can have a default price level, and there is no need to duplicate identical items for different price levels. This feature saves time, and keeps customers happy and allows businesses to capture the maximum revenue possible from each customer group.


According to a study by Bain & Company, increasing customer retention rates by just 5% translates into a 25% to 95% increase in profits. Conversely, a reduction in customer retention rates will significantly impact your bottomline – which is why it’s essential for businesses with multiple locations to track available stock levels and values at each place so that they can fulfil orders, avoid shortages, and keep customers happy. Unlimited stock locations can be set up in TradeGecko. This feature is not currently available in Xero.

It’s essential for businesses with multiple locations to track available stock levels and values at each place, ensuring they can fulfil orders as required. Unlimited stock locations can be set up in TradeGecko. This feature is not currently available in Xero. 

Stock control

The new Xero Tracked Inventory feature includes the facility to adjust stock levels one single item at a time. With TradeGecko, stock levels can be adjusted across multiple items, simultaneously. You can further refine this by adding a range of extra information: Status, Procurement Status, Stock Overdue, Stock Location and Destination Location. Effective stock control ensures the business doesn’t have too much money tied up in stock, yet they’re still able to meet their obligations. This will also enable you to work more closely with your suppliers, and make sure that your inventory is getting delivered on time, in good quality, and to the right places.

Resource focus

Xero has stunned the business community with the speed at which it’s been able to develop and release new features. It’s impressive. 

However, specialist inventory add-on solutions are also launching new features rapidly, and their resources are focused primarily on improving and streamlining their own inventory management solution. So, if you’re in need of a specific new inventory feature, it’s likely to be released by a specialist inventory solution before it’s incorporated into your accounting solution.

Retaining independence

Using a separate inventory solution means you are not tied to a particular accounting solution. So, if at a future date you decided to change accounting solutions, you could just switch your settings in TradeGecko to look at your new accounting solution.

In conclusion

You never want to pay for something you don't need, and if your business was using an add-on inventory solution before, you might take a good look at the new release, like what you see, and decide to save some cash by moving your inventory management back into Xero.

However, I don’t think this will happen. Once a business has experienced the depth of information they can attain from a specialist inventory solution like TradeGecko, they’ll likely be happy to continue using the solution.

And while it is relatively simple to move inventory back into Xero, people also like to stick with a solution they know — so they simply may not get around to it.

A lot of businesses have been watching the cloud space with interest, and now that Xero offers inventory management, they’ll want to move their business to Xero. From my experience, once a business is using Xero, it frees up resources within the business, and they’re ready to step up and play a bigger game. This in turn leads to the need for a full-fledged inventory management solution. Xero’s Tracked Inventory release is a valuable stepping stone for many businesses on the path to utilising a cloud-based inventory solution like TradeGecko’s.

There will always be value in what add-ons can bring to the Xero business community. As independent dynamic businesses, they’re focused on improving and developing their own solution — and challenging expectations. Their business goals align harmoniously with Xero's ongoing release cycle, and ongoing innovation allows for better and more flexible cloud-based business management solutions.

Do you agree? Do you think there is there any need for cloud-based inventory add-on solutions now that Xero has released its Tracked Inventory feature?

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What's the difference between Xero and TradeGecko inventory management?

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