Automate supplier quotes and POs with Xero: compare prices, approve fast and avoid overpaying

Category: Tools, Materials & Tech • Niche: Procurement, Xero, automations, job costing

Contents

• Why this matters now
• The workflow at a glance
• Set up the basics in Xero
• Capture and compare supplier quotes automatically
• Approval rules that suit UK trades
• Create the PO in Xero without retyping
• Receiving and 3‑way match that actually reconciles
• Costing to jobs so margins stay honest
• What are people saying on Reddit?
• FAQ

Why this matters now

Material prices move weekly. Trades teams waste hours emailing merchants and retyping lines into accounts. A light layer of automation can:

• Pull quotes from merchants into one view
• Score price and delivery automatically
• Route approvals to the right person
• Push a neat, itemised PO to Xero
• 3‑way match delivery, PO and bill so month end is tidy

Useful background: Xero purchase orders, Travis Perkins material price index.

The workflow at a glance

1. Request: site foreman raises a need on mobile (form or app)
2. Compare: AI reads 3 quotes and scores price, delivery, terms
3. Approve: manager approves if under threshold
4. PO: Xero PO created with items and delivery address
5. Receive: goods in, 3‑way match to PO and supplier bill

Set up the basics in Xero

• Turn on Purchase Orders: Business → Purchase orders → New purchase order. Xero guide: Create a purchase order
• Contacts: add merchants you use weekly (Travis Perkins, Wickes, local timber yard)
• Items: set up frequent materials with codes and default accounts (e.g., TP-CLS38x89, PB12.5, COPPER-15MM)
• Tracking: use two Xero Tracking Categories such as Job and Cost type (Materials, Plant, Subbies)

Capture and compare supplier quotes automatically

Goal: stop retyping email/PDF quotes and remove guesswork.

Options that work now:

• Email parsing + sheet: forward quotes to a single mailbox, parse to a Google Sheet, use a scoring formula (price, delivery days, minimum order, carriage)
• Low-code tools: Power Automate or Make can watch your shared inbox, extract line items, and write into a “Quotes Inbox” table
• AI assist: use an LLM to read PDFs and map item, unit, qty, unit price, delivery, validity. Keep prompts simple and check against known item codes

Scoring example:

• Total price weight 60
• Delivery days weight 30
• Payment/return terms weight 10

Top resources to benchmark and sanity‑check:

• Compare The Build live merchant prices for common materials
• Procore material price tracker for trend direction

Approval rules that suit UK trades

Keep it quick for the team but controlled for the business.

• Under £250: auto‑approve to preferred supplier
• £250–£1,000: supervisor approval on mobile
• £1,000+: director approval with two taps
• Always flag: price spike over 15 percent against last 60 days, or delivery over 5 working days when a job start is booked

Send approvals via email, Microsoft Teams or WhatsApp, but store the audit trail with the quote and final PO.

Create the PO in Xero without retyping

Once the winner is approved, auto‑build the PO draft with:

• Supplier, delivery address and site reference
• Item codes, descriptions, qty, unit prices
• Delivery date promised
• Your job code in Tracking Category

Then push to Xero as a Draft Purchase Order so an office admin can spot‑check and Send.

Short how‑to video if you are new to POs:

Receiving and 3‑way match that actually reconciles

When goods arrive:

• Mark items received against the PO
• Request the supplier bill referencing your PO number
• 3‑way match: PO vs delivery vs bill totals. Variances over 2 percent go back for a credit or an approved change

Zapier and similar tools can trigger checks like “if bill arrives before goods received, hold for review.”

Costing to jobs so margins stay honest

Do not leave materials as uncoded overheads. Two simple patterns:

• Xero Tracking to job code, then report Materials by job each month
• If you use job management (Jobber, Tradify, ServiceM8): mirror item codes and let the PO sync into the job costs

Related reads in the Academy:

• Build a live job margin workflow: Tradify to Xero or QuickBooks without double entry
• Automate CIS returns from job sheets: Xero and QuickBooks setup, rules and statements

What are people saying on Reddit?

• Procurement pros discuss moving from manual spreadsheets to AI‑assisted quote comparisons: Better Way to Compare Supplier Quotes?
• Supply chain thread on comparing long price lists and using Excel models: Strategies for comparing long price lists

FAQ

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