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Xero bookkeeping for manufacturers

Before anything is made, a factory is buying: raw materials, parts, packaging and consumables, often from the same suppliers on account. We keep that buying side current in your Xero file, checking each bill against what was ordered and delivered and keeping a clear view of which suppliers are waiting on payment.

Get a Xero bookkeeping quoteAbout this service
  • By Book Keeping Pros
  • Sources checked 15 Oct 2026

What we handle in Xero on the buying side

We work from the supplier invoices, delivery dockets and orders you send us, and keep each bill in Xero with its paperwork.

  • Supplier invoices for steel, timber, resin, fabric, packaging and other inputs entered as Xero bills when they come in, each with its original invoice attached
  • Each bill compared with your order and the delivery docket when it is entered, with short deliveries, substitutions and price changes listed so you can raise them with the supplier
  • Materials you keep in stock recorded as Xero tracked inventory items, with every delivery billed against the right item so Xero holds a running quantity
  • Credits for returned or faulty material recorded from the supplier's credit note and set against the bills it relates to
  • Supplier statements compared with the bills and payments in Xero each month, with any missing bill, unapplied payment or credit still owing listed for you
  • Tracking options for product line or production area chosen on material bills, keeping purchases grouped while your accountant determines when and how material costs reach the profit and loss
  • Xero's aged payables report kept current, grouping each supplier's unpaid bills by age, to help you decide which to pay first
  • Payments matched to existing supplier bills and customer invoices, and every bank and credit card account checked against its statement, with any differences explained

Not included

Placing orders, negotiating prices with suppliers or putting a value on materials held in stock. Ordering stays with you, and valuation and costing belong with your accountant.

Businesses in Manufacturing (ANZSIC division C)

Actively trading businesses across Australia
90,663 businessesAustralian Bureau of Statistics, Counts of Australian Businesses, June 2025, checked 15 October 2026
Of those, classified as non-employing
42,895 businessesAustralian Bureau of Statistics, Counts of Australian Businesses, June 2025, checked 15 October 2026
Of those, with 1 to 4 employees
25,136 businessesAustralian Bureau of Statistics, Counts of Australian Businesses, June 2025, checked 15 October 2026

Businesses by main state or territory

  1. New South Wales28,884 businesses
  2. Victoria23,606 businesses
  3. Queensland18,355 businesses
  4. Western Australia9,957 businesses
  5. South Australia6,631 businesses
  6. Tasmania1,894 businesses
  7. Australian Capital Territory652 businesses
  8. Northern Territory493 businesses
Source: Australian Bureau of Statistics, June 2025. Counts of Australian Businesses, data cube 8: Businesses by industry division by Statistical Area Level 2 by employment size ranges (8165DC08.xlsx). Checked 15 Oct 2026.

Businesses by number of employees

  1. Non-employing42,895 businesses
  2. 1 to 4 employees25,136 businesses
  3. 5 to 19 employees15,478 businesses
  4. 20 to 199 employees6,616 businesses
  5. 200 or more employees538 businesses
Source: Australian Bureau of Statistics, June 2025. Counts of Australian Businesses, data cube 8: Businesses by industry division by Statistical Area Level 2 by employment size ranges (8165DC08.xlsx). Checked 15 Oct 2026.

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Manufacturers' questions about Xero

Can you check supplier bills against what we actually received?
Yes, if you send us the delivery dockets or goods received notes. We compare each bill with them and with your order, and where the quantity or price differs we let you know before it is paid, so the supplier can be queried.
How should we send you supplier invoices?
Whichever way suits your team: forward them to us by email, or attach them to the bill in Xero yourself. Either way the invoice stays attached to its bill, so the original sits with the record.
Will Xero tell us how much material we have on hand?
For materials set up as tracked inventory items, Xero holds a quantity that moves with the bills and sales recorded against them. Recording what production uses up, and valuing what's left, is done the way your accountant sets out.
How do we know what we owe suppliers right now?
Xero's aged payables report sorts each supplier's unpaid bills by age. Because bills are entered as they reach us, the report stays current, and we send it with your monthly reports.
A supplier's statement doesn't agree with our records. What happens?
We compare the statement with the bills, credits and payments recorded in Xero and list the differences, such as an invoice that went astray or a payment still sitting unallocated on the supplier's side, so they can be taken up with the supplier.
Can material spending be split by product line?
Yes. A product-line tracking option on each material bill groups the purchases for that range. Purchases can remain in stock before becoming an expense, so your accountant determines the costing and timing used in the profit and loss.

Sources

  1. Counts of Australian Businesses, data cube 8: Businesses by industry division by Statistical Area Level 2 by employment size ranges (8165DC08.xlsx)

    Australian Bureau of Statistics. Actively trading businesses at 30 June 2025, released 16 December 2025. Checked 15 October 2026.

    Based on Australian Bureau of Statistics data, Counts of Australian Businesses, including Entries and Exits, June 2021 to June 2025, licensed under CC BY 4.0 Licence: CC BY 4.0.

  2. Correspondence, GCCSA 2021 to GCCSA 2026 (CG_GCCSA_2021_GCCSA_2026.csv)

    Australian Bureau of Statistics. ASGS Edition 4, July 2026 to June 2031, released 22 July 2026. Checked 15 October 2026.

    Source: Australian Bureau of Statistics, Australian Statistical Geography Standard (ASGS) Edition 4, licensed under CC BY 4.0 Licence: CC BY 4.0.

  3. Greater Capital City Statistical Areas digital boundary file, 2026 (GCCSA_2026_AUST_SHP_GDA2020.zip)

    Australian Bureau of Statistics. ASGS Edition 4, July 2026 to June 2031, released 22 July 2026. Checked 15 October 2026.

    Based on Australian Bureau of Statistics data, Australian Statistical Geography Standard (ASGS) Edition 4, licensed under CC BY 4.0 Licence: CC BY 4.0.