From stockouts and overselling to global supply chains and manufacturing complexity, inventory is often the reason finance teams begin looking beyond Xero. Our panel brought three different perspectives:
What Xero does well and where it reaches its limits
Jeff kicked off the conversation by acknowledging Xeroâs place in the journey:
âWhat Xero does really well is introduce businesses to the basics of inventory management. But when those capabilities are stretched beyond their limits, thatâs when businesses come to us looking for an add-on.â
He explained that Xeroâs inbuilt functionality is fine for very simple operations: a handful of SKUs, no manufacturing, no complex landed costs. But once businesses begin to sell online, consolidate inventory, or expand their range, Xero alone isnât enough.
âMost of our customers who use Xero donât rely on its native inventory function. Itâs intentionally simple, and when businesses outgrow it, the ecosystem provides the flexibility to choose the right inventory platform for their needs.â
Early signs itâs time to scale up
From CIN7âs perspective, Andrew outlined the common triggers that push businesses to look for more:
âWe usually see inefficiencies first: stockouts, overselling products, or overstocking. Thatâs cash tied up in a warehouse instead of in a bank account.â
Other early signs include:
- Expanding into multiple sales channels (e-commerce, marketplaces, international regions).
- Bundling, kitting, or contract manufacturing.
- Needing purchase order intelligence and data-driven planning.
âAccounting applications arenât designed to capture detailed stock movements and sales information. Having that in one central system gives businesses the insights to prevent bottlenecks and plan growth properly.â
A real-world case: Dinosaur Designs
Lauren shared the story of Dinosaur Designs, a Sydney-based company with over 10,000 SKUs, nine retail stores worldwide, an e-commerce site, and global wholesale distribution.
âIt was safe to say that Xeroâs inventory was never going to be sufficient for our products. With 10,000 SKUs, it just couldnât keep up.â
The company considered moving to ERP, but ultimately chose to stay with Xero:
âXero gave us everything we needed for accounting and reporting, and it was so easy to use. We trusted the information. That was one of the biggest things.â
Instead, they doubled down on CIN7, upgrading to CIN7 Core to capture manufacturing costs, track stock movements accurately, and manage global logistics.
âWeâve seen improvements already in the accuracy of whatâs in our warehouse and whatâs coming through production. Moving away from manual spreadsheets into barcode scanning and streamlined processes has made a huge difference.â
Managing Xeroâs âsoft limitsâ
One question from the audience was about Xeroâs performance under large transaction volumes. Jeff explained:
âHigh transaction volumes, especially from e-commerce, can bloat Xero if every invoice comes in individually. The solution is consolidation. Tools like A2X let you bring in a single daily invoice rather than hundreds, while still keeping all the detail synced.â
Lauren confirmed that this approach works at Dinosaur Designs:
âWith nine stores and our e-com site, pulling in all those sales individually was never going to be reasonable. Using A2X lets us consolidate into Xero for financial reporting, while CIN7 manages the inventory detail.â
Balancing cost and complexity
Another common concern raised was cost. Some businesses find inventory solutions expensive or too complex for their stage. Andrewâs advice was to zoom out:
âItâs not just about filling todayâs gap. Itâs about looking at your workflows and your growth trajectory. The right tech stack can take you from a few million in revenue to 10 or 20 million without slowing down.â
He shared the example of a customer who started with CIN7 at zero revenue but scaled rapidly by getting their tech stack right early on:
âThey could experiment with sales channels and switch them on seamlessly. Having the right stack from the beginning allowed them to grow fast without being distracted by operational bottlenecks.â
Underutilised features and staged adoption
Both Jeff and Andrew emphasised that inventory systems like CIN7 can do far more than most businesses realise, but adoption works best in stages.
Jeff explained:
âMost businesses donât have the resources to do everything at once. The key is to have a plan, know your North Star, implement in stages, and make sure you get value from each stage before moving on.â
Andrew pointed to CIN7âs newer features:
âWeâve evolved from being just an inventory app to bridging the gap to a lightweight ERP. Tools like our Foresight AI forecasting, SYN7Pay for faster payments, and advanced kitting can be game-changers, but many users donât even realise theyâre there.â
Lauren added that stocktaking and detailed reporting remain on her roadmap:
âWeâd really love to improve our stocktake capabilities. And while Xeroâs reports are fine, weâve found external analytics tools invaluable for deeper insights.â
The takeaway
The panel agreed: inventory is often the point where businesses start asking if Xero can keep up. But with the right ecosystem tools and a staged, well-planned implementation, many product-based businesses can continue to grow on Xero long after theyâve outgrown its native inventory.
âYou donât need to fly blind. With the right stack, you can trust your numbers, plan growth, and keep Xero at the heart of your system.â - Jeff Atizado
If you missed the full conversation, you can watch the recording here.
Next week in the Scaling with Xero recap series, weâll dive into Managing Multi-Entity and Month End with Mayday.
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