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Customers, Vendors, Employees, Other

Last updated on May 02, 2026

What "kind" means on a contact

When you create a contact, BitBooks asks for a kind (a category). Four options:

  • Customer
  • Vendor
  • Employee
  • Other

The kind is metadata. It doesn't change much functionally, but it affects:

  • Filtering and grouping in the Contacts list
  • Default behavior in some flows (e.g., sales transactions default to Customer contacts)
  • Reports that segment by counterparty type
  • Tax reporting templates (a 1099 form, for example, is for non-employee individuals you paid)

Pick the kind that best describes the relationship.

Customer

Anyone who pays you for a product or service. The other side of your sales transactions.

Examples:

  • A retail customer paying for coffee
  • A consulting client paying for hours
  • A subscriber paying a monthly fee
  • Another business that bought from you

For one-off cash sales where you don't track individuals, you can create a generic "Cash Customer" or "Walk-in Customer" contact and reuse it. That works fine for a coffee shop.

Vendor

Anyone you pay for a product or service. The other side of your expense transactions.

Examples:

  • Your landlord
  • Your software providers (Slack, AWS, Adobe, etc.)
  • Your accountant
  • A contractor who did one-off work
  • A supplier of inventory or raw materials

For one-off cash purchases (e.g., a meal at a random restaurant), you can skip creating a contact or use a generic "Misc Vendor."

Employee

People you employ.

Examples:

  • W-2 employees in the US
  • Salaried staff
  • Hourly staff

Why a separate kind? In some jurisdictions, payments to employees flow through a payroll system (taxes, benefits, etc.) and the accounting is different from vendor payments.

BitBooks doesn't do payroll itself. If you're paying employees, the typical pattern is:

  • Run payroll through a separate system (Gusto, Wagepoint, etc.)
  • Each pay period, post a journal entry in BitBooks summarizing payroll: salaries expense, payroll tax expense, cash out
  • Each employee can be a contact (kind = Employee) so individual payment records stay clean

Other

Anyone who doesn't fit the above three. Examples:

  • A lender (someone you've borrowed from). Their loan principal repayments aren't really an "expense"; they reduce a liability. Use kind = Other.
  • An owner or shareholder. Their capital contributions and dividends aren't sales or expenses; they're equity events. Use Other.
  • A government tax authority. Tax payments aren't an "expense" in the normal sense; they're a separate flow. Use Other.
  • Anyone who spans roles or doesn't have a clean categorization.

A few edge cases

Contractor vs Employee

In some jurisdictions, the distinction between contractor and employee is legally significant (different tax forms, different benefit obligations).

In BitBooks, an independent contractor is typically Vendor kind. They're an outside party you pay for services; they handle their own taxes.

An employee is Employee kind. Different tax forms.

If you're unsure (it's a gray-area worker), talk to your accountant. The kind in BitBooks doesn't determine tax treatment; the underlying relationship does.

Customer who is also a vendor

Some businesses have counterparts who appear on both sides. For example, a Bitcoin exchange that you both buy from (vendor) and sell to (customer).

Best practice: create two contacts. "Coinbase (Vendor)" for purchases and "Coinbase (Customer)" for sales. Each kind drives different reports cleanly.

Same person across organizations

If you manage multiple BitBooks organizations and the same person appears in several, each org has its own contact list. There's no shared contact pool. You'd create the contact in each org as needed.

What you can change later

Most contact fields are editable any time:

  • Name (changes propagate everywhere)
  • Email, phone, address
  • Memo

The kind is harder to change after the contact has been used in transactions. Changing kind from Customer to Vendor would re-classify all the historical transactions that used this contact, which can be confusing.

If you really need to change kind, the cleanest path is: archive the original contact, create a new one with the right kind, and update past transactions to reference the new one (or leave history as-is).

Reports that use the kind

A few places where the kind affects the view:

  • The Contacts page lets you filter by kind
  • Some reports (e.g., a future "Spend by Vendor" or "Sales by Customer" view, when shipped) segment by kind
  • Tax-export templates (e.g., 1099 prep) target Vendor and Employee kinds specifically

For most everyday work, the kind is mostly informational. Pick correctly at creation; you'll mostly forget it after that.

Common questions

"What if a contact's role changes (was a customer, now they're a vendor)?"

Best practice: leave the original contact, create a new one for the new role. They'll show as two contacts because they really are playing two roles.

"Do I have to pick a kind?"

Yes, but Other is always valid if nothing else fits. The kind is required because reports group by it.

"Can I have hundreds of contacts?"

Yes. BitBooks handles large contact lists. The Contacts page paginates and supports search.

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