How to Invoice in Xero: Our Guide

Efficient invoicing is essential for managing cash flow and maintaining positive relationships with clients. Xero simplifies the invoicing process, allowing businesses to create, send, and track invoices with ease.

This guide provides a step-by-step explanation of how to invoice in Xero, helping you maximise its features to streamline your billing.

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Why Use Xero for Invoicing?

Xero's invoicing tools save time and reduce errors by automating many parts of the billing process. With professional templates, payment integration options, and real-time tracking, Xero ensures your invoices look professional and get paid faster.

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How to Create an Invoice in Xero

1. Log in to Xero: Navigate to xero.com and log in to your account.
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2. Go to the Invoices Section: From the main dashboard, click Business in the top menu, then select Invoices.
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3. Create a New Invoice: Click the New Invoice button in the top left of the Invoices menu bar. This opens the invoice creation form.
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4. Enter Invoice Details:
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   • Contact: Start typing the customer’s name in the contact field. If the customer is not yet in your contacts, you can add them directly from this screen by clicking Add “name” as a new contact. You can also add your own details to send a test invoice to yourself in order to check how it will look for customers.
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   • Issue Date: Set the date the invoice is created.
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   • Due Date: Define when payment is due (e.g., 30 days from the invoice date).
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   • Invoice Number: Xero automatically generates invoice numbers, but you can customise them if needed.
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   • Reference Details: You can include a reference to make it easier to search for the invoice or align it with your bank account transactions.
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   • Invoice Currency: Using the dropdown menu, select the currency that you want the invoice to be made in. Simply search for the currency you require by typing in the name of the currency or the ISO currency code (e.g. GBP British Pound Sterling).
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   • Tax: Using the dropdown menu underneath the Amounts are box, select if the invoiced amount is Tax exclusive, Tax inclusive, or No tax, if tax does not apply.
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5. Add Items or Services:
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   • Use the Item dropdown to select products or services from your inventory.
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   • If no predefined items are set up, you can do so in this window by selecting Create new item, or you can manually enter a description, quantity, and price.
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   • Xero calculates totals automatically, including applicable taxes.
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6. File attachment(s): Add any notes or attach any relevant files by using the options at the bottom of the invoice. For recurring customers, you can create a standard template to save time.
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7. Save or Send the Invoice:
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   • If you're not ready to send it, click Save & close.
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   • To send the invoice directly to the customer, click Approve and then Email.

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How to Send Invoices in Xero

1. Choose the Delivery Method: After approving an invoice, you can choose between sending it via email, generating a PDF to print, or sharing an online invoice link.
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2. Add Personalisation: Xero automatically generates email copy outlining the details included on the generated invoice, however you can personalise your email by editing the subject and body text. Xero also includes a link to view and pay the invoice online.
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3. Send the Invoice: Click Send to email the invoice directly to the customer. The invoice’s status will update to “Awaiting Payment” in the Invoices dashboard.

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How to Track and Manage Invoices in Xero

1. Monitor Invoice Status: In the Invoices section, you can view a list of all invoices categorised as Draft, Awaiting Approval, Awaiting Payment, Paid, or Repeating. This helps you track your receivables at a glance.
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2. Send Reminders: For overdue invoices, Xero allows you to send automated reminders. Customise reminder settings under Settings > Invoice Settings > Invoice Reminders, then simply follow the on-screen instructions.
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3. Record Payments: When a customer pays, click on the invoice and select Mark as Paid. If you’ve linked a bank account to Xero, payments will be reconciled automatically.
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4. Generate Reports: Use Xero’s reporting features to analyse your invoicing history and identify trends in customer payments. View all reports under Accounting > Reports.

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Best Practices for Invoicing in Xero

• Use Professional Templates: Customise your invoice templates under Settings > Invoice Settings to include your logo and brand colours.
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• Automate Recurring Invoices: For repeat customers, set up recurring invoices to save time and reduce manual work.
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• Enable Online Payments: Connect payment platforms like Stripe or PayPal to allow customers to pay directly from the invoice.

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Equals Money integrates with Xero

Our platform syncs your Equals Money transaction data directly into Xero daily, providing a seamless, real-time overview of your finances.
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• Save time with automatic bank feeds, removing manual, time-consuming imports and allowing focus on more strategic tasks.
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• Reduce errors by eliminating manual data entry; our integration automatically pushes purchase data to Xero, minimising the risk of human error.
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• Get real-time control of cash flow with a single view of spending, removing the need for manual statement reports.

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Conclusion

Invoicing in Xero is straightforward and efficient, providing tools to streamline your billing process and improve cash flow.

By leveraging Xero’s features, you can ensure your invoices are professional, accurate, and easy to pay, leaving you more time to focus on growing your business.

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