Learn how to create professional invoices in Xero Accounting. Discover...
JacRox are Xero Gold Partners
Experienced Chartered Accountants
Managing Customer Payments in Xero: A Comprehensive Guide
Introduction: Streamlining Payments with Xero Central
Managing customer payments efficiently is vital for maintaining healthy cash flow in your small business. Xero accounting software offers a host of features that make this process seamless. From creating invoices in Xero to reconciling transactions, this guide aims to cover every step to manage customer payments in Xero.
Why Choose Xero for Payment Management?
Xero offers a robust payment service that integrates seamlessly with your Xero account. With features like online payment options and automated reconciliation, Xero is the go-to accounting software for managing payments.
Step 1: Creating Invoices in Xero
Before you can receive payments from your customers, you need to create an invoice.
How to Create an Invoice
- Login to your Xero account.
- Navigate to the ‘New Invoicing’ section.
- Use an invoice template or create a new one.
- Click ‘Save’ to send the invoice via email.
Invoice Template and Customisation
You can customise your invoice template in Xero to fit your small business needs. This includes adding credit card logos to indicate accepted payment methods.
Step 2: Setting up Payment Services
Adding a Payment Service
- Navigate to the ‘Payment Services’ under ‘Settings’.
- Click to add a new account with a payment service provider like Stripe or GoCardless.
- Once you’ve added a payment service, a ‘Pay Now’ button will automatically appear on your approved invoice.
Edit a Payment Service
You can edit a payment service to change the name that shows in Xero. This helps to make it more recognisable to your customers.
Step 3: Receiving and Reconciling Payments
How to Apply a Payment
- When a customer pays an invoice, Xero marks the invoice as paid.
- Record the payment manually or integrate with Xero to automate the process.
Cash Flow and Reconciliation
After payments are received and applied to invoices, you can reconcile these in Xero for accurate cash flow tracking.
Handling Late Payments
Xero also helps manage late payments. You can set a due date on the invoice and send automated reminders for unpaid bills.
Additional Features: Automate and Get Paid Faster
Xero allows for the automation of many payment-related tasks, including bank reconciliation and coding, helping you get paid faster.
Online and Credit Card Payments
Customers can pay using a credit or debit card via the payment service, making it convenient and quick.
Summary: What’s Next in Managing Payments with Xero?
Xero simplifies the payment process, from creating invoices to receiving and reconciling payments. Its robust features ensure that you maintain healthy cash flow, making it the ideal choice for small businesses.
When you send an invoice to a customer they can use the ‘Pay Now’ button to the online invoice or PDF. This will take them through to a secure page where they can pay you via the payment service account of their choice, such as PayPal or GoCardless.
Xero currently supports over 800 bank accounts across Australia, New Zealand, UK, US and Canada.
Yes – when creating an invoice you have the option of entering your supplier details so that they appear on every single invoice created from that template.
We were instantly impressed with their approach to accountancy
Mark Moppet | Managing Director
JacRox is transformational, saving us hours a week in mundane tasks, making life easier.
Duncan Ogilvie | Managing Director
On every occasion we’ve sent an enquiry they’ve been straight back to us with an answer
Paul Mulderrig | Managing Director
Xero businesses we’ve helped achieve great things