What action should you take to keep Xero updated with new suppliers or customers?

Creating a new contact is the appropriate action to keep Xero updated with new suppliers or customers because this process allows you to accurately add unique records for each new entity you want to track in your accounting software. In Xero, having each supplier or customer as a separate contact ensures that all relevant transactions and information related to those entities are properly organized and maintained.

When you create a new contact, you can input all the necessary details such as their name, contact information, and financial settings. This not only streamlines your workflow but also helps in managing invoicing, payments, and tracking your relationships with those suppliers or customers efficiently.

In contrast, archiving existing contacts may be useful for decluttering your contact list, but it does not facilitate the addition of new information. Deleting old contacts would result in losing historical data, which could be detrimental for reporting or auditing purposes. Importing a new spreadsheet of contacts could introduce errors or duplicates if not handled carefully, and it is generally used when migrating data or making bulk updates rather than simply adding new individual contacts.