A supplier (or vendor) is a business or individual that provides goods or services to your business. Supplier transactions create accounts payable obligations.
Suppliers are the businesses and individuals you purchase from - they provide the inputs your business needs to operate. Managing supplier relationships effectively involves negotiating favourable terms, paying on time, monitoring quality and maintaining a diversified supplier base. From a bookkeeping perspective, each supplier should have a record in your accounting system with their contact details, payment terms, bank details for payment and any applicable tax information (like ABN or VAT number). Every purchase from a supplier creates an accounts payable entry that needs to be recorded, approved and eventually paid. Maintaining accurate supplier records is important for: tax compliance (verifying ABN/VAT details for input tax credits), payment management (knowing what is owed and when), expense analysis (understanding where money is spent) and audit preparation. SortBooks maintains accurate supplier records in Xero by matching bank payments to the correct supplier and verifying transaction details.
SortBooks helps with the bookkeeping behind supplier 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 supplier 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.
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.
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.
Payment terms specify when payment is expected from a customer. Common terms include payment on receipt, net 7, net 14 and net 30 (meaning payment due within that many days).
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.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.