Xero Invoicing: Create, Send & Track Invoices Like a Pro

Xero Invoicing: The Complete Guide

Getting paid starts with sending professional invoices on time. Xero makes invoicing straightforward, but there are tips and features that many users miss. Here is how to invoice like a pro.

Setting Up Your Invoice Template

Before you send your first invoice, customise your template in Settings then Invoice Settings then Invoice Templates.

Branding

Upload your business logo and choose your colour scheme. A branded invoice looks more professional and reinforces trust with your clients. Use a high-resolution logo (at least 300px wide) for best results.

Template Layout

Xero offers several invoice layouts. The default works for most businesses, but you can customise:

• Which fields are displayed
• Column order and headers
• Footer text (payment terms, thank you notes)
• Tax display options (inclusive, exclusive, or no tax)

Payment Details

Include your bank details directly on the invoice - BSB, account number, and account name. This removes a barrier to payment. Clients should never have to ask how to pay you.

Online Payments

Set up online payment services through Settings then Payment Services. Xero integrates with:

• Stripe - For credit and debit card payments
• GoCardless - For direct debit payments
• PayPal - For PayPal payments

When online payments are enabled, your invoices include a "Pay Now" button. Clients can pay with a single click, which dramatically reduces payment times. Studies consistently show that invoices with online payment options get paid 2-3 times faster than those without.

Creating Invoices

Standard Invoices

Navigate to Business then Invoices then New Invoice. Fill in:

To: Select the contact (customer). If they are not in your system yet, you can add them on the fly.

Date: The invoice date. Usually today, but can be backdated if needed.

Due Date: Calculated from your payment terms. For example, Net 30 sets the due date 30 days from the invoice date.

Invoice Number: Auto-generated by Xero. You can change the numbering format in settings.

Reference: Optional. Useful for purchase order numbers or project references.

Line Items: Add each product or service:

• Description: Clear description of what you are billing for
• Quantity: Number of units or hours
• Unit Price: Price per unit
• Account: Revenue account to assign the income to
• Tax: GST treatment (usually GST on Income)

Recurring Invoices

For clients you bill the same amount regularly, set up repeating invoices. Go to Business then Invoices then Repeating, and create a template.

Specify:

• Frequency (weekly, fortnightly, monthly, quarterly)
• Start and end dates
• Whether to auto-approve and send

Recurring invoices are automatically created and can be automatically sent, saving you from creating the same invoice every month.

Quote to Invoice

If you use Xero Quotes, you can convert an approved quote directly into an invoice with one click. This saves re-entering all the line items and ensures consistency between what you quoted and what you bill.

Sending Invoices

Email from Xero

The easiest method is emailing directly from Xero. Click "Approve" then "Send." The invoice is sent as a PDF attachment with a "View and Pay Online" link.

Customise your email template in Settings then Invoice Settings then Email Settings. Keep it concise but professional.

Bulk Sending

If you have multiple invoices to send, use the batch email feature. Go to Business then Invoices, select multiple approved invoices, and choose "Email."

Best Practices for Sending

• Send immediately when work is completed or goods are delivered
• Do not batch invoices to send at month-end - the sooner you invoice, the sooner you get paid
• Include a clear subject line with the invoice number
• Follow up if you do not see the invoice has been viewed (Xero tracks this)

Tracking Invoices

Invoice Status

Xero tracks each invoice through its lifecycle:

• Draft - Created but not yet approved
• Awaiting Approval - Pending review
• Awaiting Payment - Sent to customer, payment pending
• Paid - Payment received and matched

Viewed Status

When you send invoices via Xero, you can see if and when the client has viewed the invoice online. If an invoice has been viewed but not paid, you know the client is aware of it - which changes your follow-up approach.

Automatic Reminders

Set up automatic payment reminders under Settings then Invoice Settings then Invoice Reminders. Configure:

• A reminder a few days before the due date
• A reminder on the due date
• Follow-up reminders at 7, 14, and 30 days overdue

Automatic reminders are polite but persistent. They save you from the awkward task of manually chasing payments.

Getting Paid Faster

Based on data from thousands of small businesses, here are the most effective strategies:

1. Invoice immediately - Every day you delay invoicing is a day added to your payment cycle.

1. Enable online payments - The "Pay Now" button reduces friction and speeds up collection.

1. Use clear payment terms - Net 14 gets paid faster than Net 30. Consider whether shorter terms are feasible for your business.

1. Be specific - Detailed line items reduce client queries that delay payment.

1. Send reminders - Automatic reminders work. Most late payments are due to forgetfulness, not unwillingness.

1. Offer incentives - Consider a small discount for early payment (e.g., 2% discount for payment within 7 days).

1. Follow up personally - If automatic reminders are not working, a phone call is more effective than another email.

Effective invoicing is not just about getting the paperwork right - it is about getting paid reliably and quickly. Xero gives you all the tools; the key is using them consistently.