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This seems to be similar to https://productideas.xero.com/forums/939198-for-small-businesses/suggestions/45048505-purchase-orders-allow-for-backorders Which requests allowing for backorders.

Hi all 👋,

This seems to be an issue that may be solvable, I think. If we can ensure the user uses the same reference between the purchase order number and the bill reference then it should easily be calculated on a new UI.

I'm currently making an app that tackles a bunch of these Xero issues in one place so you don't have to go many places.

It's called https://x-extensions.vercel.app

Would appreciate any feedback on this idea (feedback button in app), lets make it happen!

I also require this feature urgently, as we have a lot of projects on the go and we need to off-set partial payments from the Purchase order and be able to track what still need to be paid. When will this come into affect?

I, too, need this feature urgently. Really frustrating in a construction company, when subcontractors are submitting draws against an over-all proposal. We want to know how much is left to pay out to the subcontractors at intervals during a project. Having to stop and calculate manually is crazy when everything else is so efficient.

I am flabbergasted that Xero doesn't show the deductions of amounts from a PO when the bill is created directly from the PO. Please get this function sorted asap. Yes, there is a link in the notes section to the bill, but it still requires manually opening various tabs and using an external calculator. It is so admin heavy right now. Please fix, asap.

It is important that we are able to record committed costs so that we can track what is billed against purchase orders as many of our deliveries are split so would be good to see what balance is on a PO for many of our projects.

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.

This is one of the most basic feature that any accounting system should have. Very surprised that XERO does not have this function yet. Would appreciate if this can be look into asap as it is affecting the workflow of our business.

Absolutely essential for businesses to rack agreed levels and ensure no billing is missed or delayed

We need to be able to track committed costs, so this is basic functionality for any decent finance system.

Can you provide a timeline for when this feature request will be taken to development?

This is crazy that we can't see remaining PO balances and remaining amounts to invoice customers. Likely will change accounting system for our org if this can't get resolved.

An absolute basic that Xero should have already incorporated.

This is the only finance system I have come across where you cant do this. I really like every thing else about Xero however it is the deal breaker for me.

Totally agree with Charlotte Jakes' comment. Xero is the only accounting software I've used which does not do this. Please can someone at Xero make this a priority!

I agree with Laura Bishop comment below. The PO system/activity, if your partially take a PO to billing the remaining values on a PO should be adjusted, this is a normal function on an accounting system and should have been in place already on Xero.

Yes - this also links to the benefit of a partially filled pack slip [delivery order details]; from a revenue & sales capture pov, it is generally best to get the 100% order logged...but client's often prefer partial deliveries rather than the 100% ordered amount. So being able to generate a packing slip which is a subset of the full order is an option that would help.

Ability to assign supplier invoices to a PO and then see how much is left on a PO to make sure they are not overbilling. We have to do this in Excel, externally to Xero.

To be able to track the Purchase Order items approved but not invoiced by the supplier is critical. Those are "committted" costs, a crucial concept in project cost management. It is inconceivable that Xero does not have this feature implemented.

Purchase orders seem like a pointless feature if partial bill payments cannot be tracked along the way.