A Complete Guide to Invoicing in Xero

Xero makes it simple to create and send invoices from anywhere, on any device. Whether you are a freelancer billing your first client or a growing company dispatching hundreds of invoices a month, Xero gives you the tools to get paid faster and keep your books accurate without the admin headache.

In this guide, we walk through the full invoicing process — from building your first invoice template to setting up automated invoice reminders and connecting payment solutions like Stripe and GoCardless. If you want to streamline your billing and spend less time on data entry, this is for you.

Why Use Xero as Your Invoicing Software for Small Business?

Xero is not just accounting software — it is a complete invoicing platform built for UK businesses. Xero UK gives you everything you need to create, send, and track invoices in one place, without switching between tools or re-entering data.

Here is what makes Xero stand out as invoicing software for small business owners:

  • Professional invoice templates — customise your invoices with your logo, brand colours, and payment terms so every invoice looks polished and consistent
  • Send invoices on the go — use the Xero accounting app on your phone or tablet to create invoices wherever you are
  • Automated reminders — stop chasing late payers manually. Xero sends follow-up emails on a schedule you set
  • Online invoice payments — let customers pay directly from each invoice via Stripe and GoCardless, so you get paid faster
  • Real-time dashboard — track invoices that are draft, sent, viewed, overdue, or paid at a glance
  • Xero App Store integrations — Xero integrates with hundreds of apps in the Xero App Store to extend your workflow, from CRM tools to inventory management

Unlike standalone tools, every invoice you create in Xero feeds directly into your accounts, VAT returns, and financial reports. There is no double-handling of data. Your bookkeeping stays accurate and up to date without extra effort. For freelancers, contractors, and growing businesses alike, that integration is what makes Xero the smarter choice.

How to Create and Send Invoices in Xero: Step by Step

The invoicing process in Xero is straightforward, even if you have never used accounting software before. Here is how to create invoices and get them out to your customers in minutes.

Step 1: Set Up Your Invoice Layout

Before you dispatch your first invoice, head to Settings > Invoice Settings in your Xero account. Here you can build a layout that includes your business name, logo, registered address, bank details, and default payment terms. Xero offers several pre-built templates you can adjust, or you can create a completely custom design. Having a professional, branded layout means every invoice you dispatch looks consistent and trustworthy.

Step 2: Create a New Invoice

Navigate to Business > Invoices > New Invoice. Select your customer (or add a new one), then add line items with descriptions, quantities, unit prices, and the applicable VAT rate. The accounting software calculates totals instantly. Your default terms are applied — for example, due in 14 or 30 days — but you can override these on any individual invoice.

You can also attach files, add notes, or reference a purchase order number. If you bill customers the same amount each month, set up a repeating invoice and the system handles it for you.

Step 3: Dispatch the Invoice

Click Approve and Send. Xero emails the invoice directly to your customer with a PDF attachment and an online invoice payment link. Your customer can view the invoice in their browser and pay instantly — no printing, no posting, no waiting. You can also process invoices in bulk to save time when you have multiple customers to bill at once.

Step 4: Track and Manage Payment

Every invoice moves through a clear lifecycle: draft, awaiting approval, sent, viewed, and paid. The dashboard gives you real-time visibility into outstanding amounts, upcoming payments, and overdue invoices. You always know exactly where your money is.

How to Automate Your Invoicing Process and Save Hours

Manual work eats into time you could spend on your business. Xero lets you put repetitive tasks on autopilot so you can focus on what matters.

  • Repeating invoices — set up recurring schedules for retainer clients or regular services. Xero creates and dispatches invoices on a timetable you define, whether that is weekly, monthly, or quarterly
  • Automated invoice reminders — configure email reminders for invoices approaching their due date, on the due date, and at intervals after. The system nudges customers consistently without you lifting a finger
  • Bank rules — let Xero reconcile incoming payments against invoices. Your books update the moment money hits your bank, eliminating manual data entry
  • Batch processing — create and dispatch invoices for multiple customers in one go. You can merge line items or send consolidated documents to keep things tidy for clients who prefer a single statement

When you set up these workflows, invoices go out faster, late payers get chased consistently, and your cash flow improves. Professional hands-off invoicing is one of the biggest time-savers Xero offers.

Invoice Reminders: Stop Chasing Overdue Invoices Manually

Chasing late payments is one of the most frustrating parts of running a small business. Invoice reminders in Xero solve this by sending polite, professional follow-up emails on your behalf.

You can set up reminders at multiple stages: a gentle nudge before the due date, a reminder on the day it is due, and escalating follow-ups at 7, 14, and 30 days overdue. Each reminder can use a different tone and message, and Xero tracks which reminders have been sent so you never double-chase.

Automated reminders mean fewer overdue invoices and healthier cash flow — without the awkward conversations. You stay professional, and your customers stay informed.

Give Customers More Ways to Pay With Online Invoice Links

The faster your customers can pay, the healthier your cash flow. Xero connects with leading payment solutions so customers can pay directly from their online invoice with a single click.

Connect Xero to Stripe and GoCardless through the Xero App Store to accept credit card, debit card, and direct debit payments. Payment buttons appear on every invoice you dispatch, removing the friction of manual bank transfers. Research from Xero suggests businesses that offer online payment options get paid up to two weeks faster on average.

You can also set up payment terms that suit your business — whether that is 7-day, 14-day, 30-day, or end-of-month. Clear terms on every invoice set expectations and reduce disputes.

Manage Invoices and Quotes in One Workflow

Xero handles invoices and quotes in a single, connected workflow. Create a quote, send it to your customer for approval, and convert the accepted quote into an invoice with one click — no re-entering data, no risk of errors.

This is particularly useful for project-based businesses where pricing needs to be agreed before work begins. You can track the status of every quote alongside your invoices, so nothing slips through the cracks. The platform also lets you import invoices and bills from your previous accounting system via CSV upload, making the switch to Xero straightforward.

Customise Your Invoices to Look Professional

First impressions matter. With Xero, you can customise your invoices to match your brand perfectly. Add your logo, choose your brand colours, set custom fields for project references or PO numbers, and add footer text with your terms and conditions.

A professional, branded invoice builds trust and makes your business look established from day one. Xero offers multiple template options to get you started, and you can preview exactly how your invoice will look before dispatching it. For more detailed guidance on design and layout options, visit Xero Central or check the help documentation within the platform.

Send Invoices on the Go With the Xero Mobile App

You do not need to be at your desk to keep things on track. The Xero accounting app — available on iOS and Android — lets you create invoices, approve them, and send invoices on the go from your phone or tablet.

Use Xero on your mobile to capture receipts, reconcile bank transactions, and check your dashboard while you are out meeting clients. For field-based businesses, mobile invoicing means you can bill a customer the moment a job is done, rather than waiting until you are back at your desk. Faster invoicing means faster payment.

Reporting Features That Simplify Your Finances

Every invoice you create in Xero contributes to a rich set of financial reports. The accounting software generates aged receivables summaries, revenue breakdowns by customer or service line, and profit and loss statements that pull directly from your invoice data. Your reports are always current without manual reconciliation.

You can also export invoice data for use in external tools or share reports directly with your accountant through the platform. Use Xero to review history for a specific client — filter by customer name and date range to pull up every invoice, payment, and credit note in seconds. Online invoicing in Xero means your data flows straight into your accounts, saving hours of manual data entry every month.

Xero Plans and Pricing

Xero offers several tiers to suit different business sizes. The Starter plan covers basic invoicing for sole traders and micro-businesses — you can create invoices, set up payment terms, and connect your bank. The Standard and Premium plans add unlimited invoicing, multi-currency support, project tracking, and deeper integration with payroll and inventory.

All plans include access to the Xero App Store, automated invoice reminders, and online invoice payment links. You can try Xero for free before committing to a subscription, and there are no hidden invoice limits on the higher plans. The monthly cost includes all software updates and UK-based support.

FAQs About Xero Invoice Features

Is Xero good for invoicing?

Yes. Xero is consistently rated among the best invoicing software options for small businesses in the UK. It combines professional invoice layouts, automated reminders, online payment links, and full accounting integration in a single platform. Unlike standalone tools, every invoice feeds into your accounts — your ledger, VAT returns, and cash flow reports all update in real time.

How do I invoice in Xero?

Log in to Xero and go to Business > Invoices > New Invoice. Add your customer, line items, and VAT rate. Click Approve and Send to email the invoice directly. The whole process takes just a few minutes. You can also create invoices from the Xero mobile app when you are away from your desk.

What is the best invoicing software for the UK?

For most UK small businesses, Xero is the clear choice. It combines invoicing software with full accounting, bank reconciliation, and VAT returns in one platform. If you already use Xero as your accounting software, invoicing is built in — no need for a separate tool.

Simplify Your Invoicing With JacRox

Getting your workflow right from the start saves hours every month and keeps your cash flow healthy. At JacRox, we help businesses across Manchester set up invoicing in Xero — from template design to payment gateway integration with Stripe and GoCardless.

Whether you are a Xero user trying to set up your first invoice or want to streamline your processes with the accounting software you already use, our Xero-certified team can help. We handle the setup so you can focus on running your business.

Get in touch for a free consultation or explore our Xero bookkeeping services to see how we can help.