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  1. Purchase Orders - Allow for backorders

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    17 comments  ·  Purchase orders, bills & inventory » Purchase orders  ·  Admin →
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    In development  ·  AdminKelly Munro (Community Manager, Xero) responded

    Hi community, we'd like to provide an update for you all here with backorders for tracked inventory now in the process of rolling out to customers.

    As this rolls out, customers will be able to approve sales invoices for tracked inventory even when there isn't enough available stock.

    Your stock on hand will be allocated straight away, and the remaining quantity goes on backorder. Incoming stock is then automatically allocated to the oldest approved backorders.

    This coupled with the ability to track the receiving of goods from a Purchase order through to Bills will help solve for needs shared in this idea.

    We throughly appreciate all your input through this thread and will come back to confirm once this roll out reaches 100% of users. 😊

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    Curtis Mar commented  · 

    The Core Problem

    Our inventory system is showing a mismatch. For one specific item, the system reports a closing quantity of -6,252 (which matches the backorders) but a closing balance of 0. These two figures contradict each other, and we need to fix this discrepancy.

    How the Process Should Work

    1. I create a Sales Invoice, which generates backorders.

    2. The system registers these backorders as -6,252 in the inventory.

    3. When I approve the supplier/vendor bill for those backorders, the quantity should automatically return to 0.

    4. This process works perfectly for every other item—it just fails for this one specific item.

    The Workaround I Tried

    Usually, we fix this by:

    - Removing the problematic item from the Sales Invoice.
    - Approving the vendor bill.
    - Re-adding the item back to the Sales Invoice.

    This trick normally clears the negative balance. However, it did not work for the -6,252 item. The negative balance stubbornly remains.

    The Bigger Worry: Manual Checking

    Do I really have to go through every single item in the system one by one to find these errors?

    - That would be an enormous, messy job.
    - More importantly, if I miss even one item out of thousands, the entire Inventory Item Summary report will be wrong for that month.

    The Hidden Timing Trap

    It's easy to spot a negative quantity at the end of the month. However, there is a more subtle issue: same-day timing.

    If I approve the Sales Invoice before I approve the vendor bill on the same day, the system will show a negative quantity for that specific day. Because it happens intra-day and might correct itself by month-end, these errors are incredibly difficult to detect using standard reports.

    This makes the problem even harder to solve, as we can't just look at final numbers—we have to audit the exact order of approvals on specific dates.