Yes, you can run inventory, manufacturing, purchasing, projects and CRM in ERPNext while Xero or MYOB stays your accounting system. In this setup ERPNext handles the day-to-day operational work: stock, bills of materials, work orders, purchase orders and sales pipelines. The finished financial transactions (sales invoices, supplier bills and payments) sync across to Xero or MYOB, where your bookkeeper and accountant keep working exactly as they do now. ERPNext runs alongside your accounting software. It gives your operations team a proper system to work in, and your books stay where they are.
Why businesses split operations and accounts
Most growing businesses reach a point where Xero or MYOB is still doing the accounting job well, but the operational side has outgrown it. Stock is tracked in a spreadsheet. Production is planned on a whiteboard. Purchasing happens over email. Quotes live in someone's inbox.
The usual answer is "move to a full ERP", which often means changing accounting systems too. That brings retraining for the finance team, a new chart of accounts, a ledger migration, new bank feeds, a payroll change and an accountant who now has to learn a different system at year end.
Running ERPNext for operations alongside Xero or MYOB avoids most of that. The operations team gets an open-source ERP built for inventory, manufacturing, projects and purchasing. The finance team keeps the system they know, along with the bank feeds, BAS process and payroll that already work.
What lives in ERPNext and what stays in Xero or MYOB
The most important part of the design is deciding which system owns which data. Here is how we usually split it.
ERPNext owns the operational records:
- Items, stock levels, warehouses and stock movements
- Bills of materials (BOMs), work orders and production planning
- Purchase orders, goods received and supplier lead times
- Sales orders, quotes and delivery notes
- Projects, tasks and timesheets
- CRM: leads, opportunities and customer follow-ups
- Approval workflows for things like purchase requests
Xero or MYOB owns the financial records:
- The general ledger and chart of accounts
- Sales invoices and supplier bills (once they're finalised)
- Payments, bank feeds and bank reconciliation
- GST and BAS
- Payroll
- Financial statements and the reports your accountant uses
Customers, suppliers and tax codes exist in both systems, so they need to be matched carefully. Each customer in ERPNext needs to map to the right contact in Xero or MYOB. Each item needs to map to the right income or expense account, and each tax code needs to line up with the matching code on the accounting side, such as GST on Income or GST Free.
One honest point: ERPNext still creates its own internal accounting entries behind the scenes when stock moves or invoices are raised. In this setup we treat those as an operational sub-ledger. Xero or MYOB remains the official set of books.
How the sync actually works
The connection is built using the Xero API or the MYOB API on one side and ERPNext's API on the other. A typical flow looks like this:
- A sales order in ERPNext is delivered and invoiced.
- The invoice is pushed to Xero or MYOB with the right customer, account codes, tax codes and tracking categories.
- The customer pays, and the payment is reconciled in Xero or MYOB against the bank feed as normal.
- The payment status flows back to ERPNext, so the sales team can see what has been paid without asking finance.
Purchasing works the same way in reverse. A purchase order is raised in ERPNext, goods are received against it, and the supplier invoice becomes a bill in Xero or MYOB, ready to approve and pay.
Inventory value needs a deliberate decision. Usually we keep stock items as untracked in Xero or MYOB and post a summarised journal from ERPNext each month for stock on hand, cost of goods sold and any work in progress. That gives your accountant a clean, reconcilable figure without pushing every stock movement into the ledger.
For example, if your team makes custom steel brackets, ERPNext would hold the BOM, issue raw materials to the work order and record the finished goods. Xero would receive the sales invoice when the order ships, plus a month-end journal that brings the stock and cost of sales figures into line.
You may come across community-built connectors for ERPNext and Xero. Some are a reasonable starting point. Check how actively they're maintained and whether they handle Australian GST, tracking categories and multiple entities the way you need. When a ready-made app doesn't fit, a custom integration is usually the more reliable option. See our Xero API integration and MYOB API integration pages for how we approach those.
What your accountant still sees
Very little changes for your accountant, which is a big part of the appeal. They still log into the same Xero or MYOB file, see the same invoices, bills and bank reconciliations, prepare BAS the same way and run the same reports at year end.
What they will notice is better data. Invoices arrive with consistent account codes. Bills are matched to purchase orders. A regular stock journal comes with a supporting report from ERPNext. They don't need an ERPNext login, although you can give them read-only access if they want to check stock or project figures.
When this split makes sense, and when it doesn't
Running ERPNext alongside Xero or MYOB tends to suit businesses that:
- Are happy with their accounting system, bank feeds and payroll
- Have outgrown spreadsheets or add-on apps for stock, production or projects
- Want manufacturing, purchasing or project features without paying for a large ERP
- Have an accountant who wants to keep working in Xero or MYOB
Moving up to a larger system such as MYOB Advanced or NetSuite may be the better choice if:
- You run several entities with complex intercompany trading and consolidation
- Transaction volumes are high enough that syncing every invoice becomes a burden
- Your stock valuation or costing rules need to sit directly in the ledger
- Your finance team has outgrown Xero or MYOB itself, not just the operational side
There's no single right answer. It depends on where the complexity in your business actually sits. Our ERPNext implementation page covers how we scope this, and if you'd like a thorough, documented look at your processes and systems before deciding, that's what our $5,000 Process & Systems Audit is for.
Frequently asked questions
Can ERPNext run alongside Xero or MYOB?
Yes. In this setup ERPNext runs your operations and Xero or MYOB stays your accounting system. Invoices, bills and payments end up in Xero or MYOB, and that remains your official set of books.
ERPNext vs Odoo for Australian businesses that want to keep Xero?
Both can run inventory, manufacturing and CRM. ERPNext is fully open source, with all its modules included, and can be self-hosted or run on Frappe's hosted service. Odoo has a free Community edition and a paid Enterprise edition, and many of its more advanced features sit in Enterprise. Odoo is also designed around its own accounting app, so keeping Xero alongside it means relying on third-party connectors. Either can work. ERPNext's open API and lack of per-module licensing often make it simpler to pair with Xero or MYOB.
Does this work with MYOB as well as Xero?
Yes. MYOB AccountRight and MYOB Business both have APIs that can receive invoices, bills and contacts and return payment information. The design is the same as with Xero, but the field mapping is different.
How much does an ERPNext and Xero or MYOB integration cost?
Costs vary widely depending on the size of the business, how many systems are involved and how much needs to be custom-built. That's why we scope every project first and give you a fixed quote after a free initial chat.
Will my bookkeeper need to learn ERPNext?
Usually not. Your bookkeeper keeps working in Xero or MYOB. The people who use ERPNext day to day are your operations, warehouse, production, purchasing and sales staff.
If you're weighing up ERPNext and want to know whether it can sit comfortably alongside your current Xero or MYOB setup, book a free initial chat. We'll talk through how your business runs, where the friction is, and whether this split makes sense for you. You can also call Aaron on 1300 470 091.