Alex Hartley


Managing Customer Payments in Xero: A Comprehensive Guide

An invoice marked 'paid'.
Xero Makes The Invoicing Process Smooth

Introduction: Streamlining Payments with Xero Central

Welcome to JacRox, a brand division of Jack Ross Chartered Accountants in Manchester. We are dedicated to offering expert Xero services to a wide variety of clients, from sole traders to large corporations. If you are in need of state-of-the-art cloud accounting software, use the contact form on the right and one of our JacRox team will be in touch to discuss next steps.

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.

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Jack Ross has been my accountants since I set up my business in 2016. From the outset I was helped with advice, support and encouragement. I cannot commend them highly enough. Always on hand to answer any question and responsive to any changes in the economy which might concern their clients. I don’t have to worry about the financial side of my business as all of that is taken care of and dealt with by Umar and the brilliant team. If you are looking for a top class accountancy firm which maintains the personal touch they are for you!

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Paul Clark 29/09/2017

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Benjamin 22/02/2017

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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 have 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 is 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.

Alex Hartley
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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.

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Speak to a Xero Expert Today!

Take advantage of harnessing the full potential of Xero for your business. Whether you're a start-up, a thriving SME, or a larger enterprise, our Xero-certified accountants are ready to guide you through every step. Please fill out the form below, and let's begin your financial transformation.

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