XBert Type: Standard
Accounting Software: Xero
Country Restriction: US only
Risk Type: Tax Risk
Business Function: Contacts
Overview
This XBert identifies U.S.-based supplier contacts who have received payments exceeding $600 in the current financial year but lack a valid Employer Identification Number (EIN) or have an incorrectly formatted tax reference.
What it does
XBert scans your supplier records and flags contacts that meet the following criteria:
Total payments exceed $600 in the current financial year.
Missing or improperly formatted EIN (not a 9-digit number).
Contact name does not include indicators like "LLC" or "Inc."
Country field is empty or not set to "US."
This alert helps ensure compliance with IRS requirements for reporting payments to contractors and vendors.
How it works
XBert analyzes your accounts payable data to identify suppliers who have been paid over $600 in the current financial year. It then checks the associated contact records for the presence and validity of the EIN. If the EIN is missing, incorrectly formatted, or other discrepancies are found (such as missing country information or lack of business entity indicators), XBert generates an alert for each affected contact.
Example/Use Case
John from John's Appliances enters a new contact record to complete a purchase from ACME Supplies LLC. At the time of entry, he was not able to obtain the business's Tax Reference Number. As this is not required to complete the payment, he sets a reminder to follow up and get the required tax number at a later date, but John forgets!
Later, during an audit, it's discovered that ACME Supplies LLC received payments exceeding $600 without a valid EIN on record, leading to potential penalties for John's Appliances.
Accounting software
This XBert is compatible with:
Xero
Which countries it supports
This XBert is designed for use in the United States.
Processes
This XBert falls under the Cleanup category.
To action:
Click on the contact link in Xero to review the supplier's details.
Verify the presence and correctness of the EIN.
If missing or incorrect, contact the supplier to obtain the correct EIN.
Update the contact record with the accurate EIN.
For more information on EIN requirements and how to apply for one, visit the IRS Employer ID Details.