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Feature Request: PO Discrepancy Tracking and Four-Way Matching in Xero

Xero currently lacks a mechanism to track discrepancies between purchase orders, goods received, and bills. This creates a significant gap in inventory and financial accuracy, especially when POs are used across both sales and purchasing workflows.

Use Case / Scenario:

A Purchase Order (PO) is created and sent to a vendor for 10 units.

That same PO is copied to a sales invoice and sent to a customer, assuming full fulfillment (10 units).

However, the vendor only delivers 7 units and issues a bill for those 7.

In Xero, when the bill is entered for 7 units, the system does not flag the discrepancy or track the 3 unfulfilled units from the original PO.

As a result, inventory and accounts payable only reflect 7 units, while the customer invoice still reflects 10 units — leading to an inventory shortfall and potential overcommitment to the customer.

The Problem:

Xero does not currently support:

Discrepancy tracking between what was ordered (PO), what was received (goods), and what was billed.

A formal Goods Receipt step in the workflow.

Any alert or flag when there is a mismatch in quantities between PO, Bill, and Invoice.

This creates risk in several areas:

Inventory Management: The system overstates stock available for sale or delivery.

Customer Commitments: You may invoice customers for goods that haven't been received or cannot be fulfilled.

Accounts Payable Oversight: There's no easy way to verify if you're being billed accurately against what was actually delivered.

Audit Trail: There is no proper trace of unfulfilled orders or delivery discrepancies.

Request:
Introduce a proper four-way matching capability in Xero that covers:

Purchase Order (PO)

Goods Receipt

Supplier Bill

Customer Invoice or Payment

Additionally:

Allow Xero to track unfulfilled units on partially billed or partially received POs.

Provide alerts or flags for mismatches between what was ordered, received, and billed.

Maintain open PO balances that clearly show what quantities are outstanding.

Why It Matters:
This functionality is essential for businesses managing physical inventory, especially those who:

Pre-sell inventory based on POs

Rely on partial deliveries

Need accurate stock-on-hand for order fulfillment

Require a clear audit trail between procurement and invoicing

Any update on this? It is very essential to have a built in report.

Will there be another update on this? I can see the report shows PO totals by Contact, however, it's not very useful as a report to determine outstanding balance on each Purchase Order x Invoices is crucial, otherwise it's too time consuming to do it manually and also keep a separate control for this.

Did anyone find a solution to this? Has anyone perhaps used any 3rd party software to get into the back end data or used SQL to get it.

We can't report our European VAT properly as a result of lacking the visibility to see what invoices are raised against which PO's. We can't match our purchases to our sales without drilling into every single PI and writing the PO number next to the PO.

Xero is lacking some seriously basic functionality for a so called accounts system. I remember 10 years ago seeing Xero and thinking this is the future. 10 years on it's exactly as it was back then with no further dev.

I am chatting with a few companies on getting access to back end data to see what's possible but if anyone can share their experiences with 3rd party software I'd appreciate it.

Hi, Do we know when there will be an update so you can run a report to see your balance remaining? May have to go to another software for that purpose if it's going to be a while.

It would be great if the lines on the purchase state if it's been invoiced or what the remaining quantity is as it very time consuming to check the multiple bills against a large purchase

Please can you advise WHEN this is going to be resolved. Not very useful if you cannot print a report to determine outstanding balance on each Purchase Order!!! A very basic business requirement.

We raise purchase orders with multiple lines and receives bills from the supplier for each line. I understand you can raise individual bills against the purchase orders.

However Xero cannot run reports showing what invoices have been raised against that purchase order and keep track of the remaining balance on the order.

It would be good to have more reporting functions for purchase orders.

It would be good to have this in a report but i would like the actual purchase order to show when lines have been invoiced. I constantly get invoices for part of a purchase order and then have to work out what has already been invoiced.

It's getting there with the introduction of being able to report on POs, but just need to fully develop this idea so it is on one report, as mentioned by Gwen. It is something a lot of big companies would benefit from - a lot of our clients are asking for this type of report.

Guys,
This is the same issue that has been around for 3 years. This was said to be getting fixed in 2022....
Please can we get an ETA on this!
Thanks,
Lewis