XBert Type: Standard
Accounting Software: Xero, MYOB, QuickBooks
Country Restriction: AU only
Risk Type: Tax Risk
Business Function: Purchases
Overview
The "Payment to a Cancelled Supplier" XBert identifies payments made to suppliers whose Australian Business Numbers (ABNs) have been cancelled according to the Australian Business Register (ABR). This helps protect your business from compliance risks when trading with unregistered or deregistered entities.
What it does
This XBert detects authorised bill and bank payments made to suppliers whose ABNs are recorded as cancelled. It highlights the total amount paid after the supplier’s cancellation date, helping you review whether those transactions were appropriate and compliant with ATO guidelines.
How it works
XBert analyses authorised supplier payments and spend money transactions made after your organisation was onboarded to XBert and after the supplier’s ABN was cancelled. If the ABN linked to the supplier is matched to an ABR record with a cancelled status, XBert will trigger an alert and calculate the total amount paid under these conditions.
Example/Use Case
Bill runs a pizza shop and buys a commercial oven for $6,000 from a supplier. Unaware that the supplier’s ABN had been cancelled, Bill processes the payment. Later, the ATO questions his tax return. Because the supplier was not a registered business, Bill is required to withhold 47% of the transaction or faces potential penalties. Had Bill checked the ABN status before making the payment, he could have avoided this issue by requesting a valid ABN or choosing another supplier.
Accounting software
All Australian-compatible accounting software (e.g., Xero, MYOB, QuickBooks Online).
Which countries it supports
Australia only.
Processes
This alert falls under the ‘Purchases (AP)’ category and is designed to manage tax risk related to payments made to deregistered suppliers. To resolve this issue:
Look up the supplier’s ABN using the ABN Lookup service to confirm whether it is active.
If the ABN is invalid or cancelled, contact the supplier to obtain the correct registration details.
Update the ABN in your accounting software’s contact record.
Review and, if necessary, amend any related bills, payments, and bank transactions — particularly if GST implications have changed.
Avoid further payments to cancelled or unregistered suppliers unless absolutely necessary and only after assessing any tax obligations.