Managing Customers and Vendors in Xero

Step-by-step guide to managing customers (contacts) and vendors (suppliers) in Xero

1. Access the Contacts Section

   • Go to Contacts > All contacts.
   • You’ll see two main categories:
     • Customers → people/companies you sell to (issue invoices).
     • Suppliers/Vendors → people/companies you buy from (enter bills).

2. Add a New Customer or Vendor

   • Click New Contact.
   • Enter:
     • Contact name (company or individual).
     • Email, phone, website.
     • Postal and physical addresses.
   • Optional: Add notes (e.g., preferred communication method).
   • Save.

3. Add Financial Details

   • Under the contact profile:
     • Default account code (e.g., Sales for a customer, Purchases for a vendor).
     • Default tax rate (e.g., GST, VAT, Sales Tax).
     • Default currency (useful for international customers/vendors).
     • Payment terms (e.g., 30 days).

4. Manage Customers

   • Create and send sales invoices, quotes, and statements.
   • Track outstanding payments in Aged Receivables.
   • Set up invoice reminders for overdue accounts.
   • Apply credit limits and monitor customer history.

5. Manage Vendors

   • Enter bills and purchase orders against suppliers.
   • Record payments when made (bank feed or manual).
   • Use Aged Payables to see what you owe and when.
   • Track vendor performance (spend by supplier reports).

6. Import & Export Contacts

   • To bulk add: Go to Contacts > Import.
     • Download Xero’s CSV template.
     • Fill in customer/vendor details.
     • Upload file.
   • You can also export contacts for backup or migration.

7. Merge or Archive Contacts

   • If duplicates exist → select both → Merge.
   • If a contact is no longer active → Archive (past transactions remain intact).

8. Reporting & Analysis

   • Run Customer Invoice Report to see sales by customer.
   • Run Supplier Spend Report to see expenses by vendor.
   • Use Contact Activity to view full transaction history with each contact.

In Xero, customers (contacts) and vendors (suppliers) are managed under the same Contacts section, but the advanced features let you do far more than just storing names and addresses. Here’s the full breakdown:

Advanced Features of Managing Customers & Vendors in Xero

Smart Contact Management

• Store multiple addresses, phone numbers, and emails for each contact.
• Separate billing, shipping, and office addresses.
• Assign multiple primary people (Accounts Payable, Accounts Receivable, Sales).

Default Settings for Each Contact

• Set default:
  • Currency (great for international customers/vendors).
  • Payment terms (e.g., Net 30, Due on Receipt).
  • Default account code (e.g., sales account for customers, expense account for vendors).
  • Tax rate (GST, VAT, exempt).
• Ensures invoices and bills are auto-coded consistently.

Credit Limits & Risk Control

• Set credit limits for customers to manage exposure.
• Track overdue balances and flag risky customers.
• Useful for credit control and cash flow management.

Contact Groups

• Create groups (e.g., VIP Clients, International Vendors, Frequent Suppliers).
• Useful for targeted reporting or applying bulk actions.
• Can run reports filtered by groups.

Integrated Transaction History

• View all sales, bills, payments, and communications for a contact in one place.
• Provides a 360° view of the relationship.
• Helps track disputes or payment behavior.

Multi-Currency Support

• Contacts can be set with a default currency.
• Invoices and bills automatically record FX gains/losses.
• Ideal for businesses with international suppliers or clients.

Customer Statements

• Generate customer statements (Outstanding or Activity).
• Send them directly via email to speed up collections.
• Useful for AR follow-up and audit purposes.

Attachments & Notes

• Store contracts, agreements, or correspondence as attachments on contact profiles.
• Add internal notes (e.g., “Always request PO before invoicing”).

Contact Activity Insights

• Xero automatically tracks last transaction date and account activity.
• Identify inactive customers or suppliers.
• Helps with relationship management and supplier reviews.

Merging & Cleaning Duplicates

• Merge duplicate contacts into a single record.
• Avoids confusion and keeps reporting accurate.

Integration with Sales & Purchasing Workflows

• For customers: Connect to quotes, invoices, payments, and statements.
• For vendors: Connect to purchase orders, bills, batch payments.
• Ensures contacts flow across the full business cycle.

Reporting & Analytics

• Run reports like:
  • Aged Receivables/Payables by Contact
  • Top Customers by Revenue
  • Top Vendors by Spend
• Helps identify key customers and strategic suppliers.

Automation & Payment Services

• Link customer contacts to payment gateways (Stripe, GoCardless, PayPal).
• Add “Pay Now” button to invoices for faster collections.
• Vendors can be linked to batch payments and ABA/SEPA files.

API & CRM Integrations

• Sync contacts with CRM systems (HubSpot, Salesforce, Zoho).
• Avoids double entry and improves customer relationship management.

Tip: Combine default terms + credit limits + contact groups to automate invoicing, manage risk, and analyze customers/vendors more effectively.