A bill (also called a supplier invoice or purchase invoice) is a document received from a supplier requesting payment for goods or services they have provided to your business.
In bookkeeping, a bill is the document you receive from a supplier when they want payment. It is the mirror image of an invoice - you send invoices to your customers, and you receive bills from your suppliers. When you record a bill in your accounting software, it creates an accounts payable entry (increasing your liabilities) and records the expense or asset purchase. Bills should be recorded when received (under accrual accounting) rather than when paid. This ensures your financial statements accurately reflect your obligations. Key information on a bill includes the supplier's details, invoice number, date, description of goods or services, amounts, tax treatment and payment terms. In Xero, bills are recorded in the Purchases module. SortBooks shows which bank payments match your recorded bills, so you can reconcile them in Xero in a click and close out the payable.
SortBooks helps with the bookkeeping behind bill by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing bill by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
Accounts payable (AP) represents the money your business owes to suppliers and vendors for goods or services received but not yet paid for. It is a current liability on your balance sheet.
An invoice is a document sent to a customer requesting payment for goods or services provided. It includes details of the transaction, payment terms and the amount due.
A purchase order (PO) is a formal document sent to a supplier authorising a purchase. It specifies the items, quantities, agreed prices and delivery terms.
An expense is a cost incurred in the process of earning revenue. Expenses reduce your profit and are recorded on the profit and loss statement in the period they are incurred.
Accrual accounting records revenue when earned and expenses when incurred, regardless of when cash changes hands. It provides a more accurate picture of your financial position than cash accounting.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.