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.
Purchase orders are an essential internal control for managing business spending. A PO is issued before a purchase is made, committing your business to buying specific goods or services at agreed prices. This creates a three-way matching system: the PO (what you ordered), the supplier invoice (what you were billed) and the goods receipt (what you actually received). Any discrepancies between these three documents need investigation. POs help control spending by requiring approval before purchases are made, provide a basis for checking supplier invoices for accuracy, create a paper trail for audit purposes and help with cash flow planning by identifying upcoming commitments. In Xero, purchase orders can be created and converted to bills when the supplier invoice arrives. SortBooks enhances PO management by matching incoming supplier invoices against purchase orders and flagging discrepancies in quantities, prices or terms.
SortBooks automates the bookkeeping processes related to purchase order by connecting to your Xero account and using AI to categorise transactions, reconcile bank feeds and generate accurate reports. Instead of manually managing purchase order, SortBooks handles it automatically with 97%+ accuracy - saving you hours every week and ensuring your books are always up to date and compliant.
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.
Internal controls are processes and procedures designed to safeguard business assets, ensure accurate financial reporting and prevent fraud or errors.
A supplier (or vendor) is a business or individual that provides goods or services to your business. Supplier transactions create accounts payable obligations.
SortBooks handles all the complexity automatically. Just connect Xero and let AI manage your books.