When working remotely one needs to put more effort and structure into coordinating teamwork, and ensuring each person can ask for help and get the support they need.

You won’t be able to quickly walk over and ask for help or see that someone is struggling and needs a hand.

Regular catchups, with a good meeting structure, go a long way to ensuring that all team members have the opportunity to:

  • Check-in on how they are doing.
  • Share their work updates.
  • Raise any key roadblocks they need support on.
  • Work out their issues with the team.

For operational catchups, our team broadly uses the Holacracy  tactical meeting format. We use this in conjunction with our task management software, Asana.

Here’s how we do it:

  • Meeting schedule:
    • Team meetings are scheduled twice a week on a Monday and Friday, for a duration of 30 minutes.
    • This is designed for 4-6 people, but you may need to book out a slightly longer timeslot as you are getting used to the format, or if you have a bigger team.
    • The first meeting of the week is more about tasks and co-ordination.
    • The second meeting is more of check-in and updates, but both should stick to the meeting format outlined below.
  • Meeting roles: 
    • A facilitator is needed to run the meeting and is appointed to make any notes or create tasks that arise from agenda items.
    • Everyone else represents their role(s).
  • Meeting format: 
    • Follow the below format closely, or develop your own version, but do always follow a flow to ensure all team members know how to, and can, contribute.

Meeting Format

1. Welcome

The facilitator welcomes everyone to the meeting, notes apologies of team members that couldn’t make it and confirms the time allocated for the meeting.

They can also check if anyone needs to leave early, and make a note of that so everyone is aware.

2. Opening round (1-way)

The opening check-in round is a 1-way flow where only one team member speaks, without discussion.

*Tip: It is best to have laptop screens down and phones away.

Nothing is formally required beyond a ‘hello’, but it is an opportunity for each team member to share how they are doing, what’s on their mind and to get present for the meeting.

It is not a discussion time, no sympathy or praise required, just a few moments to let your team know how your day or weekend went prior to you arriving at the meeting, to give them context for your overall mood and to get ready to make the most of the team time ahead.

As an alternative, some teams do 30 seconds of silence to help get present.

3. Checklist review (no discussion)

The facilitator asks everyone to review their tasks in Asana and make sure there is ‘no-task-left-behind.’ The team has about 60-120 seconds to do this.

The aim here is to:

  • Tick off any tasks that have already been completed.
  • Delete any tasks that were created but not actually relevant any more.
  • Adjust the due date of any overdue tasks, bringing them into the present – Yesterday is gone 👋

If you do not run a process like this, it results in tasks building up and slipping behind. This process helps us all hold each other accountable to make sure we use our Asana to-do list as a guide to running our day and week.

Everyone says ‘no-task-left-behind’ once they are up to date.

4. Agenda building (1-2 word agenda items)

The facilitator will ask the team to raise any agenda items they have, with 1-2 words only for each item. At this stage, we are only noting down the 1-2 word items, no discussions around them.

The team member also needs to specify whether the item is an ‘Update’ or a ‘To Discuss’, and how much time they need (2, 5 or 10 mins).

The difference between these two types of items is important:

  • ‘Update’: This is a 1-way communication flow from the team member on something that has changed since the last meeting that they feel the team should be updated on.
  • ‘To Discuss’: This is a 2-way communication flow where the team member specifically asks for input they need from the team, either information or a decision.

Once all team members have supplied their agenda items to the facilitator, the facilitator checks the agenda items and expected time required against the remaining meeting time.

If there is a substantial misalignment between the time remaining and the expected time, team members can offer to de-prioritise their items (move them to the bottom) or reduce time.

5. Triage issues (2-way discussion)

Here the facilitator  moves down the list of agenda items, specifically calling out each item, the name of the team member who raised it, the time allocated to this item and lastly the question “what do you need?”

The team member then explains explicitly what they need from the team. It is important to get this right because this is the opportunity to let your team know what you want from them before diving into the context.

Examples are:

  • “I need to know if we have selected a new supplier for our materials, so I can go ahead and place the order for my project.”
  • “I need to know if we can move Tuesdays working session for I have a family member visiting that day.”

By being precise about what you need the relevant team member(s) can offer the information you need or help with a decision for your issue. The aim is not to do specific work in the meeting but to co-ordinate information and support.

Common outputs from an agenda item are:

  • Creating or moving a meeting with team members to get the work support needed
    • “I need some technical help on the website project, can we put in a 30-minute session to work on that project together? Yes, let’s do Wednesday @14:30.”
  • Delegating a specific task to another team member to complete
    • “I need more materials for project X, can you order them and let me know when they arrive? Yes, I’ve added a task to order them and will let you know once received.”
  • Noting information that allows the team member(s) to continue their work
    • “I need to know if we have that new software installed yet before I change the network? Yes, it’s done and you can continue.”

The facilitator has a responsibility to make sure only one item at a time is discussed, and if a decision is required it should be clear on who should decide it. In this way, the agenda item does not become a consensus discussion but moves swiftly to the resolution. Ie. One person is responsible to make the decision, can make that decision or create a task to make that decision. Or similarly, if it’s some form of vote.

Most importantly, the agenda item is done when the person who raised it gets what they needed. If someone else has something they need, they can raise their own agenda item. The facilitator should always have the individual who raised the item in mind and keep checking in with them to see if they got what they needed. Once they have, that item is closed and the facilitator moves on to the next one.

Hopefully, you will get through the agenda in the allocated time. In the beginning, it does take time to learn how to predict the time needed for an item, and discipline to stick to it. As you and your team get used to this type of meeting format, you will easily raise an agenda list with the overall time in mind, self prioritise your issues and graciously roll over the less essential to the next meeting or address it in private communication with the people involved.

6. Closing round (1-way)

With the agenda done, it is time for each team member’s reflection on the meeting.

*Tip: It is best to have laptop screens down and phones away here too.

Nothing is formally required beyond ‘goodbye’, but it is an opportunity to share your overall thoughts on the meeting.

These can be the general feeling (“thanks for the meeting, excited for the projects and week ahead”) as well as constructive insights on how the process served the team today (“we do need to pay attention to the agenda and make sure we stick to the allocated time”).

Remember, it is one way only, so no discussion.

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Method 3 – Manual Manufacture at the time of Assembly (finished goods represented in inventory)

The idea behind this approach is to buy in raw materials, track the quantity and value of those raw materials and then convert raw materials into tracked finished goods when you do an assembly in your workshop.

Xero transfers the value of the raw materials to the finished goods item so that when you sell a finished good Xero will automatically bring the cost of sales across from the inventory account.

You set this up by:

  • Creating tracked inventory items in Xero for all your raw materials
  • Creating tracked inventory items for your finished goods (similar to a service item)

The finished good is therefore represented in your inventory once you have done this process and will be visible on stock reports.

Method 3 Example – see video here!

You start the month with no stock.

  • Create the following tracked inventory items for your materials:
    • Bicycle frame
    • Bicycle wheel
    • Bicycle seat
  • Create the following tracked inventory item for your finished good:
    • Bicycle complete
  • Buy in quantities of tracked inventory items with the following prices:
    • Bicycle frame – QTY 5 at R750 each
    • Bicycle wheel – QTY 5 at R250 each
    • Bicycle seat – QTY 5 at R200 each

As Xero treats this as tracked inventory, you will see these values go directly to your balance sheet under inventory.

You’ll note that this should be enough to make 5 bicycles overall, with 1 frame, 2 wheels and 1 seat used in each assembly. This list is called thebill of materials as if you add up the numbers it should equate to R1400 of materials per completed bicycle.

Before you can make a sale of a tracked inventory item you must have stock of that item. Go test it, you will see in a sales invoice you can only create a draft and not an approved invoice for a complete bicycle.

So, let’s manufacture then.

We have two options to do this, one uses an invoice and one uses an inventory adjustment. Both work, the invoice method may be a bit quicker as you can do all the materials at once, the adjustment method does not leave a trail of ‘internal’ invoices.

  • Manufacture 3 bicycles from the materials using an Invoice method
    • Create a sales invoice and sell the correct amount of materials for 3 bicycles to the production contact. The selling price is Zero
      • Note the impact on the profit and loss report. There should be R1400 x 3 = R4,200 in ‘Manufacturing Costs (should be zero)’
    • Create a purchase bill for 3 complete bicycles from the production contact. You need to use the overall value of the costs produced b the step above divided by the number of bicycles. For example, using our numbers above you will purchase in 3 complete bicycles at R1,400 each.
      • Pay off the purchase to the ‘Manufacturing Costs (should be zero)’
        • Note the impact on the profit and loss report. There should be no ‘Manufacturing Costs (should be zero)’ amount remaining.
  • Manufacture 2 bicycles from the materials using an Inventory Adjustment method  
    • Sell the correct amount of materials for 2 bicycles to the production contact
    • Purchase 2 complete bicycles from the production contact

Now let’s do a sale

  • Sell 4 bicycles to a customer for R5,000 each  
    • Note the impact on the profit and loss report.
      • Sales of R20,000. Cost of sales of R5,600 (4 bicycles @ R1,400 each)
    • Note what remains on the balance sheet and your inventory reports
      • One complete bicycle @ a value of R1,400

Note, you must perform the either of the two manufacture options, invoice or inventory adjustment, after each actual assembly in your workshop otherwise you will not be able to sell the finished goods in Xero.

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Method 2 – The monthly manufacturing process (no finished goods are represented in inventory)

The basic idea behind this approach is to buy in raw materials, and track the quantity and value of those raw materials.

Then when you sell a finished good perform an extra step to reduce the raw materials used in that sale to create the correct cost of sale.

You set this up by:

  • Creating tracked inventory items in Xero for all your raw materials
  • Creating untracked inventory items for your finished goods (similar to a service item)

The finished good is therefore never actually represented in your inventory. Xero calls this an ‘untracked item’, and it’s treated the same as a service offering in that there is no physical quantity on hand and you can sell unlimited amounts.

You can still see how many of these items you sold but it never shows up on a stock on hand report.

Method 2 Example – see the video here

Click here for Part 2, and Part 3 of the video

You start the month with no stock.

You create the following tracked inventory items for your materials:

  • Tricycle frame
  • Tricycle wheel small
  • Tricycle wheel big
  • Tricycle seat

You create the following untracked inventory item for your finished good:

  • Tricycle complete

You buy in quantities of tracked inventory items with the following prices:

  • Tricycle frame – QTY 6 at R450 each
  • Tricycle wheel small – QTY 12 at R50 each
  • Tricycle wheel big – QTY 6 at R100 each
  • Tricycle seat – QTY 5 at R75 each

As Xero treats this as tracked inventory, you will see these values go directly to your balance sheet under inventory.

You’ll note that this should be enough to make 6 tricycles overall, with 1 frame, 2 small wheels, 1 big wheel and 1 seat used in each assembly. This list is called the bill of materials as if you add up the numbers it should equate to R725 of materials per completed tricycle.

You then manufacture and sell a tricycle.

Note – Xero only allows you to sell these complete tricycles as they are treated as untracked inventory items.

After the sale, you can see the sales amount on your profit and loss but there is no cost of sales. If you check your balance sheet you will see the inventory is still there.

To process the cost of sales we need to do a production invoice to recognise that we have used up the raw materials during the month and sold them in the form of a finished bike.

The sale happens at zero value for all the components but this brings in the cost of sales.

When you do your stock count at the end of the month you should find you have the components for 5 tricycles still on hand. If you manufactured more but did not sell them what you will notice though is that since we are not using a method that allows finished goods to be represented you will see that the finished tricycles are still represented on the stock count as raw materials.

As only the raw materials are represented on your inventory list this method clearly works well when you manufacture to order or don’t hold many finished goods in stock over a month end.

This method is a step up from the stocktake method in terms of cost of sales accuracy as the only manual component now is entering the materials used in the manufacture of the finished goods.

Xero is calculating the average cost of your inventory so you don’t have to estimate the cost of the materials anymore. If you buy some materials at one price and some at another then Xero will keep track of this.

You can perform the cost of sale step after every finished good sale or once a month based on all finished goods sales for that month.

If you need to represent finished goods on your stock count please use Method 3.

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Xero Inventory

Xero’s inventory module allows you to purchase in and sell inventory items using the average cost method.

This means if you purchase inventory, Xero will store the quantity on hand and the average cost of that inventory, and represent the sum of those amounts on your balance sheet under inventory.

This is preferable over immediately recognising any stock purchases as an expense, as when the item is sold the average cost of that inventory item will automatically be moved from the inventory account on the balance sheet to your profit and loss under the cost of sales.

This is important as it improves the reporting on your profit and loss report, and shows you the sales and related cost of sales in the same month.

Getting this timing right, sales and cost of sales in the same month is the main part of using an inventory module and allows you to work out your profit margins.

Here are some resources from Xero on how the inventory module works:

The options available to manufacture in accounting systems

In general, there are 3 main options to do manufacturing in Xero.

Method 1 – The monthly stocktake adjustment

In this method, you would expense all raw materials when you buy them. This results in a very high cost of sales in the month of purchase. At the end of the month, you do a stock take, assign values to all the items on hand, using purchase prices or your best average estimate, and reverse out some of the cost of sales to an inventory account on your balance sheet.

Example – see the video here!

You start the month with no stock. You buy R8,500 of stock and it shows up as an expense of R8,500 in the Cost of Sales section.

You then make some sales, let’s say R17,500 of sales using R4,500 of stock.

At this point, your profit and loss show R17,500 in sales and R8,500 in cost of sales. A cost margin of 48.57% (8,500/17,500)

When you do your stock count at the end of the month you should find you have R4,000 on hand still. You then post a journal to reverse out R4,000 from the Cost of Sales and add it to your balance sheet under Inventory.

Now your sales show R17,500, your cost of sales shows R4,500. This is a cost margin of  25.71%, which is a lot better than before. Your R4,000 of stock is sitting as inventory on your balance sheet.

This is a very rudimentary method and means that you cannot track individual sales against their cost of sales. It also means that your inventory balance and cost of sales amount are based on the estimated values of your stock count.

It is the simplest to perform, however, can be done in any accounting system, and is best suited when there is a single person in charge of the business and stock who already knows the margin and cost of sales for each item they sell.

The manual manufacturing process in Xero

Manufacturing cannot be done in Xero as a standard inventory workflow. This means:

  • There is no bill of materials functionality to allow the manufacture or perform an assembly of, several raw material inventory items into a single finished good item.
  • There is no automatic calculation for cost of sales when a finished good, comprising of a number of separate raw materials in inventory, is sold.

What Xero does allow however is for you to purchase raw materials into stock, track the quantity and cost of that inventory.

With this function, you can use a manual manufacturing process to get your cost of sales and sales aligned in the same month.

There are two ways of doing this after you have bought in the raw materials as tracked inventory items:

  • Once a month, and based on what was sold, you expense the raw materials to cost of sales(method 2a).Finished goods set up as untracked ‘service’ items
  • After each manufacturing run convert the raw materials used in the process into a specific quantity of available finished goods. This reduces raw materials on hand and increased finished goods(method 2b).Finished goods set up as tracked items

Method 2b requires you to follow the process after every assembly you make as you can only sell a tracked inventory item once it’s been assembled and is in stock. Xero will not let you sell the item if the quantity is zero.

If you do not have the financial team members to drive this assembly process in the system, then method 2a is preferable as you will always be able to make the sale as untracked items do not have a quantity on hand.

Learn more about Method 2

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