How Xero reports inventory turnover.
A short reference for the finance team reconciling the number on this calculator with the number Xero returns. Report name, the menu path, the costing assumptions, and the one caveat that bites most often.
What this page is, and what it is not
This is not a buy/don’t-buy review of Xero, and it is not a pricing comparison. Inventory turnover is a formula, not a software market: any general ledger that posts COGS and tracks inventory value can produce the ratio. This page exists for the moment a CFO runs our calculator on the trial balance, runs the Xero report, and gets two different numbers. Below is why.
Where the turnover report lives
Xero’s report is called Inventory Item Summary plus Profit & Loss. The path is Reports > Inventory > Inventory Item Summary.
What the report counts as COGS
Cost of Goods Sold from the P&L; Inventory Item Summary returns cost-of-sales per tracked item.
What the report counts as inventory
Xero uses the ending inventory basis by default. Our calculator defaults to average inventory (beginning plus ending, divided by two). If you want the two numbers to agree, set both to the same basis before reconciling. See average vs ending inventory for the trade-off.
How Xero annualises
Manual. Item Summary is point-in-time; pull a beginning balance, an ending balance, average, then divide annualised COGS.
The one caveat that bites
Tracked vs untracked inventory split: untracked items hit COGS at purchase, which can pull turnover artificially high if a CFO does not separate the two.
Reconciling the Xero number with this calculator
- In Xero, run Inventory Item Summary plus Profit & Loss for the same window you used in our calculator (calendar year, fiscal year, or trailing twelve months).
- Set inventory basis to match: our calculator uses average by default; Xero uses ending. Either change ours via the toggle, or pull the second balance point from Xero and average it yourself.
- Confirm the COGS number matches your P&L. If Xero is upstream of your GL (for example Cin7 or Fishbowl feeding QuickBooks), wait for the sync to clear before comparing.
- Apply the caveat above. For mixed-method costing or multi-entity roll-ups, the single-number turnover is rarely defensible without a per-segment breakdown.
Pricing context (for completeness, not the point)
Xero publishes list pricing. Early $25/mo. Growing $55/mo is the cheapest with inventory tracking. See the vendor page for current tiers. Recent change: US pricing stable at $25, $55, $90 through 2026. New tracked-vs-untracked inventory filtering added 2026.
Related
- Our methodology - what this calculator does, and the auditor-preferred defaults.
- Average vs ending inventory - the basis choice that determines whether your number and Xero’s number agree.
- Vendor compare pages - head-to-heads framed around the turnover-reporting workflow.