Creating and sending invoices through Xero: Ultimate guide

Creating and sending invoices through xero is fast and easy. You have option to prepare recurring invoices and accept online payment via xero. This is one of the reasons to choose xero as accounting software for your business. In this post, we will learn about creating and sending invoices, creating quote, accepting payments online via xero.

Creating and sending invoices through xero: Ultimate guide

How to create invoice through xero:

To create invoice through xero, follow the steps below:

  1. Log in to your organisation.
  2. Go to Accounts < Sales from menu at the top.
  3. Click +New. Here you can see various options- Invoice, quote, Repeating invoice, credit note.
  4. Click Invoice.
  5. Following screen will appear.
  6. Fill the required details.
  7. Please note that invoice numbers will generate automatically.
  8. You have also option to attach files with invoice. This feature will help you in audit and tax purpose.
  9. You can send  invoice with customized look using branding option.
  10. If you are managing inventory, you can show inventory at item option. Inventory will be calculated automatically if you have select option of tracked inventory in setting.
  11. There is no worry about tax management in xero. Xero gives you option of tax in invoice and tax is calculated automatically. All you need to do is select option of tax – Tax exclusive, tax inclusive and no tax.
  12. You need to select respective account to show sale in profit and loss account. It may be sales account, commission income, discount received etc.
  13. You can also give discount via xero invoice so that your client can see actual price and discount you have given to him.
  14. Once you create the invoice, you can save it as draft, save and submit for approval ( if someone else is approving sales invoices in your organisation).
  15. If you approve invoice yourself, you can click approve button on right side.
  16. You can see History area at the bottom of invoice. Once you have worked with invoice and save and approve it, you can see complete history of who has created invoice, save it/ edit it,  approve it. This we can call audit log.
  17. If you want to use similar data for another invoice, you can copy the invoice and xero creates copy of the invoice. You can edit required details and new invoice is ready. It is time saving option.
  18. Xero has given new option – Preview in invoice. Now you can create invoice and preview it at the same time. Preview is available for PC and mobile devices!
  19. We are human and we make mistake many times. Xero considers this also. You can void your invoice any time if you wish to delete the invoice. Or you can edit the data and save/ approve invoice again. However, you can see voided invoices if you require to check it in future.However, xero does not consider value of voided invoices for reporting purpose. We can compare it with trash feature in gmail. 🙂
  20. If you have multi currency version of xero, you can create invoice with any currency. New currency can be added with Add currency option.
  21. No doubt, you can send invoice online through xero via Email option. You can also take print out of invoice.
  22. You have cool option of share invoice with anybody with Private URL. ( This option is pretty new in xero.) All you need to go to invoice < invoice option < Share invoice. Your customer can see invoice online with it.
  23. Last but not least, you can do accounting of  invoice payment via option given at bottom of approved invoice. Enter amount paid, Date of payment, Payment account ( Enter bank name or contra or cash account) and reference. Do not use this option when you are getting money in bank and bank accounts are imported in xero. You can credit payment via bank reconciliation.

So this was the simplest way to create and send invoice through xero.

 

How to create quote in xero:

Creating quote is similar to creating invoice with xero. Follow steps below to create and send quote in xero.

  1. Go to New < Quote.
  2. You can add Title and summary of quote. It is short narration giving idea to your client about work for which you are sending quote.
  3. Fill the required details.
  4. Narrate the terms of your business.
  5. Save the quote.
  6. Or you can directly send quote via SEND button on right side bottom.
  7. You can copy quote if you need.
  8. Once you send quote, you can convert it in invoice with one click. For it, you are required to mark invoice as accepted. Once you mark it as accepted, you can see option CREATE INVOICE. You can create invoice via it.
  9. You can also mark it as declined and revise the quote and send it again.

 

How to issue credit note in xero:

There are two methods to issue credit note in xero.

Create credit note similar to creating invoice:

  1. Create credit note similar to creating invoice. For it Go to New < Credit note and fill required details and approve it.
  2. This option is useful when you are giving bonus or special discount/ rebate  to customer.
  3. You are required to deduct credit note amount manually by allocate credit to invoice. The screen to allocate credit amount appears once you approve credit note. You can allocate later by selecting credit note option and then allocate credit.
  4. You have also option to give cash refund to customer for credit note.

 

Create credit note from invoice screen:

  1. Second method is helpful when you issue credit note due to stock return. Follow steps below to create credit note via invoice in xero
  2. For it, go to invoice against which you intend to issue credit note.
  3. Click invoice option button on right side.
  4. Select add credit note.
  5. You can see all quantity and product description here.
  6. Remove the quantity for which customer receives the goods.
  7. Now, you have quantity of stock return.
  8. Check once and approve and save credit note.
  9. Xero already deducts credit note amount against the invoice in this method.

 

How to create repeating bills in xero:

Xero gives you very important feature of creating repeating bills for your customer. This feature is useful when you are selling service/subscription on monthly cycle or you are charging same amount per month for product or service provision.

I become surprised when I see that many popular software for small businesses ( Wave, fresh book) does not give this feature.

To create repeating bill in xero, you need to follow steps below:

  1. Go to Accounts < Sales < New+ < Repeating invoice.
  2. You can set repeating bills for per month/alternate month/ quarter/ weekly/ biweekly/ 6 month. For it, you require to enter details in Repeat this transaction every ( It varies as per your requirement.).
  3. You can set invoice date and due date.
  4. If you want repeating bills for specific period, you can fill ends on. It means repeating bills will be generated up to end date. Leave it blank if you want to get repeating bills for long period.
  5. You have three option for repeating bills. It can be saved as draft on invoice date, automatically approved or approved and sent to client. When you are 100% sure with terms of repeating bills, you can select approve and send option. The invoice will be generated and sent to clients automatically. It is really time saving feature, isn’t it? That’s why xero is to be considered as best accounting software for small business.
  6. You can fill other details of repeating bills same as simple invoice.
  7. Finally, once you are satisfied with repeating bill you have prepared, save it to see the magic. 🙂

 

How to send invoice to group in xero:

Sometimes you provide similar service to various clients and charging same fees for it. In this case, you can create group of customers, create and send single invoice to group.

Ex. My firm is providing accounting service to  clients A,B and C on monthly basis. Charges for the services are same for them. In this case, I have to create different invoice with same amount, date and terms and send to clients A,B and C separately. By using group invoice feature, I can create single invoice in xero and send it to A,B and C together.

Follow the steps below to create group invoice in xero:

  1. Create group from contacts menu. For it, got o contacts < Customers. Select customers and click options on top of the screen < Add to group. You can add contacts to existing group or create new group and add them in it.
  2. Once you have created group successfully, hit  to New+ in sales screen. Here you can see invoice to contact group option. Select the group and invoice screen will be displayed.
  3. You can prepare invoice and save it as draft.
  4. You cant attach file with this invoice. Obviously !
  5. You can preview group invoice.
  6. Once you save invoice as draft, you can go to draft and approve invoice in bulk.

So this was another time saving feature of xero.

 

How to accept payment online via invoices in xero:

You can accept online payment via xero for following services:

  1. Autorize.net
  2. Braintree
  3. DPS
  4. Eway
  5. Gocardless
  6. Paypal
  7. Stripe

You are required to have account with payment service provider to accept payment via xero. When you send invoice to customer, he can see online bill and PAY now button on Top Left side of invoice. He can click the button and redirected to payment service provider’s dashboard. He gets confirmation once payment is successful. Adding payment service with invoice improves your collection amount. To add payment service in xero, follow step below:

  1. Go to sales < Any invoice < Invoice options < online payments or Go to setting < Connect < Payment services
  2. You can view active payment services.
  3. You can delete or add new payment service by Clicking add payment services.
  4. Select your payment service provider and enter your login details. If it is paypal, enter paypal email address. You are required to add other details like name which you like to appear while accepting payment, account where money will be deposited ( Create account via chart of account for it), fees account.
  5. Once you set up payment service, Click on manage themes and select payment service for various invoice themes. Do not forget to preview any invoice to make sure that payment is set up successfully.

 

How to import invoices in xero:

When you are setting up to xero from other accounting software, you are required to enter due invoices manually or import invoices in bulk. Second option is very convenient. All you need to make excel file using sample file given in xero and import the invoices. Read my post about  conversion to xero to learn how to import invoices.

 

How to send statement through xero:

It is really time consuming to send monthly statement to each customer separately. Xero gives you amazing facility to send statements to your debtors together. ( You can also send it separately ).

Follow the step below to send statement through xero:

  1. Go to Accounts < Sales and click sent statements button.
  2. Here you have two options : Activity or outstanding. You can select as per your requirement. Activity will show all the transactions details including paid invoices for debtor and outstanding feature will show only outstanding invoice summary.
  3. Select period for which you are intending to send statement.
  4. Click update.
  5. Tick the debtor name you want to send statement to and click Email. Please note that email address of debtors should be entered via contacts menu before using this feature.
  6. You can choose branding theme and email template and email message before sending statement.
  7. You may click send me copy and one statement copy will be forwarded to you.
  8. Once all things are set, click send and woo ! Your debtors will receive statements soon.
  9. You will also get message that … statements are sent successfully.
  10. If some statement is not delivered due to some reason, you will receive mail from xero for non delivery.

 

How to set invoice reminder for outstanding invoices:

Xero gives you additional feature of setting automatic invoice reminder to your debtors for overdue invoices ! Ultimately it improves your account receivable collection.

Follow the step below to set invoice reminders in xero:

  1. Go to settings < General settings < Features < Invoice settings. or Go to Accounts < Sales < See all < Click on invoice reminders off.
  2. Here you can set invoice reminders for overdue invoices as per your business needs.
  3. Tick Email customers when an invoice is … Here you can send reminder for 7 days overdue, 14 days overdue, 21 days overdue or custom days. You can also delete any reminder by clicking on edit and click on delete button of left side.
  4. You can include invoice link to the invoice pdf and turn off the reminder for small amount.
  5. There is facility to turn off reminder for specific customer. For it, go to contacts < Customers < Tick the customer name and click on invoice reminders and select turn off.
  6. You can also turn off invoice reminder for specific invoice. For it, go to invoice < Invoice option. Click turn off invoice reminder.

I suggest every business owner to use this xero feature to improve cash flow position and save the time.

 

How to create invoice template in xero:

There is nice feature in xero to use customized invoice template as per your business branding. Use the following steps to create invoice template in xero:

  1. Go to setting < General setting < Invoice settings.
  2. Here you can see standard template for invoice.All you need to do is add logo and customize setting as per your need. You can add payment advice, terms and conditions and other details as per your need. Once everything is set, you can view preview of invoice by clicking Options < Preview.
  3. You can add customized invoice template by clicking on New branding theme and selecting custom.docx.
  4. Give title of theme.
  5. Here on right side, you can see Download button. By clicking on button, you can download zip file containing invoice templates.
  6. Save the templates unzip invoice templates and you will find word files containing invoice, credit note, sales order, statement and purchase order.
  7. You can open the template you want to edit and customized fields. Read this xero guide for more help. If you are not much familiar with word features, go with standard theme. It gives almost everything you need from invoice.
  8. Do not forget to customize default setting of invoice as per your business needs. You can change due dates setting, sequence of invoice via it. Xero gives you special feature to show all outstanding of customer via online invoice. Really recommended feature ! Even you can set date of expiration of quote via xero.

I believe you can set invoice template and do necessary setting within 20 minutes. Xero is fast and easy always.

 

Wrap up:

There are many alternative of xero if you compare pricing but there are few alternative  of xero if you consider features and looking for easiest way to do accounting. I hope now you are clear about process of creating and sending invoices through xero. We will continue with other xero tutorial and share with you. Share this post on social media to encourage us to write more.

 

2017-03-02T12:11:03+00:00

About the Author:

Tanu is Chartered Accountant and Founder of Finsprout.com. She loves Music, writing, travelling and reading. She loves to write on small business and Finance area. You can follow her on FB page.