Vendor
Definition
A vendor is a person or business that sells goods or services to the business. Vendors are tracked so the bookkeeper can manage bills, payments, and vendor balances.
Example
Northstar Creative buys design software from a vendor called Adobe. Adobe is set up as a vendor, and the $450 bill is recorded under that vendor.
Why It Matters
Tracking vendors correctly keeps Accounts Payable organized and helps the bookkeeper manage who is owed what.