Xero Invoicing: How to Create and Send Invoices

Create, send and automate invoices with Xero

Templates, recurring billing and payment tracking

Xero Invoicing: The Best Invoicing Software for Small Business Owners

Xero invoicing gives small business owners a fast, professional way to create and send invoices from anywhere. Whether you are a freelancer or a growing company managing hundreds of online invoices a month, this invoicing software keeps everything organised, on-brand, and paid on time.

In this guide, we cover how to use Xero for the full invoicing process — from setting up your first branded layout to turning on reminders and offering customers multiple ways to pay. You can try Xero for free to see if it fits your workflow before committing to a subscription.

Why Use Xero as Your Accounting Software for Invoicing?

Xero is more than just accounting software — it is a complete billing platform built for UK businesses. Xero UK is cloud-based, so you can access your data from any device. Here is what makes this invoicing software stand out as the best online invoicing software for your needs:

• Professional layouts — design branded invoices with your logo, colours, and payment terms so every invoice looks polished
• Send invoices on the go — use the Xero accounting app to create invoices from your phone or tablet
• Invoice reminders — stop chasing late payers manually and let the system handle follow-ups for you
• Online invoice payments — let customers pay directly from each invoice via Stripe, GoCardless, or direct debit
• Real-time billing dashboard — see which invoices are sent, viewed, and paid at a glance
• Xero App Store integrations — connect your Xero to over 1,000 apps to extend your workflow. The Xero App Store has hundreds of options to help manage your business

Unlike standalone tools, every invoice you create feeds directly into your accounts, VAT returns, and financial reports. There is no double-handling of data, which makes your bookkeeping faster and more accurate.

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

Creating an invoice takes just a few minutes. Log in to Xero and follow these steps. Here is a walkthrough for any Xero user new to the platform.

1. Set Up Your Invoice Template

Head to Settings > Invoice Settings. Here you can customise your invoice template with your business name, logo, bank details, and default payment terms. The platform offers several layouts — choose one that suits your brand, or build a completely custom design.

2. Create a New Invoice

Click Business > Invoices > New Invoice. Add your customer, line items, quantities, and the applicable VAT rate. The accounting software calculates totals instantly and applies your default payment terms — for example, due in 14 or 30 days. You can also add notes, attach files, or reference a purchase order number.

3. Send the Invoice

Once you are happy with the details, click Approve and Send. The platform emails the invoice directly to your customer with a PDF attachment and an optional online invoice payment link. Your customer can view and pay the invoice in their browser — no printing or posting required.

4. Track Payment Status

Every invoice is tracked through its lifecycle: draft, awaiting approval, sent, viewed, and paid. The billing dashboard gives you a clear view of outstanding amounts, upcoming payments, and overdue invoices, making cash flow management much easier for small business owners.

Automate Your Invoicing and Save Time

Manual billing eats into time you could spend growing your business. The good news is that you can automate several repetitive tasks:

• Repeating invoices — set up recurring invoices for retainer clients or subscription services. The system creates and dispatches them on a schedule you define
• Payment follow-ups — configure email reminders for invoices approaching their due date, on the due date, and at intervals after. This alone can transform your cash flow
• Bank rules — automate the reconciliation of incoming payments against invoices, so your books update the moment money hits your bank account
• Batch processing — create and send invoices in bulk for multiple customers at once, saving hours of manual data entry

When you automate these billing tasks, invoices go out faster and late payers get chased consistently. The result is healthier cash flow and less admin for your team.

Give Customers More Ways to Pay With Online Invoice Links

The faster your customers can pay, the healthier your cash flow. The platform integrates with several payment gateways so customers can pay directly from their online invoice:

• Stripe — accept credit and debit card payments instantly
• GoCardless — set up direct debit for recurring billing
• PayPal — offer a familiar payment option for smaller transactions

Enable these through the Xero App Store and they appear as payment buttons on every invoice you send. Small businesses that offer online payment options typically get paid up to twice as fast as those that rely on bank transfers alone.

Manage Invoices and Quotes in One Place

The platform handles invoices and quotes in a single workflow. Create a quote, send it to your customer for approval, and convert it into an invoice with one click — no re-entering data. This is particularly useful for project-based businesses where pricing needs agreement before work starts.

You can also import invoices and bills from other systems if you are migrating from a different accounting package. CSV imports are supported, which makes the switch straightforward and means you do not lose your billing history.

Customise Invoices to Match Your Brand

First impressions matter. You can customise your invoice template with your logo, brand colours, custom fields, and footer text. Having a professional, branded invoice builds trust and makes your small business look established from day one.

For guidance on design options and best practices, visit Xero Central or check the help documentation within your account.

How Invoicing in Xero Improves Your Cash Flow

Cash flow is the lifeblood of any business, and how you handle invoicing has a direct impact on it. Late invoices mean late payments, and late payments mean cash flow gaps that can stall growth, delay supplier payments, or force you into overdraft facilities you do not need.

Xero addresses this in several ways. First, the speed of creating and dispatching invoices means you can bill clients on the same day the work is completed, rather than waiting until the end of the week or month. Second, the online payment links built into every invoice remove friction for your customers. Instead of finding your bank details, logging into their banking app, and typing in a reference, they click a button and pay in seconds. Third, the dashboard shows you exactly where your money is at any given moment: how much is outstanding, how much is overdue, and how much has been paid this month.

For businesses that invoice regularly, these small efficiencies compound into a significant improvement. Research from Xero suggests that businesses using online payment links get paid up to two weeks faster on average. That is two weeks of improved cash position every single invoicing cycle.

Invoicing Reports and Financial Insights

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 category, and profit and loss statements that pull directly from your invoice data. This means your reports are always up to date without any manual reconciliation.

You can also export invoice data for use in external tools or share reports with your accountant directly through the platform. You can use Xero to review billing history for a specific client, filter by customer name and date range to pull up every invoice, payment, and credit note in seconds.

Is Xero Good for Invoicing?

Absolutely. Xero is consistently rated among the best invoicing software options for small businesses in the UK. It combines professional invoice layouts, reminders, online invoice payments, and full accounting integration in a single platform.

Unlike standalone billing tools, every invoice feeds into your accounts automatically. You get real-time visibility into who owes what, when it is due, and whether it has been viewed — all without manual effort after the initial setup.

For sole traders and micro-businesses, the Starter plan covers everything you need to send invoices at an affordable monthly cost. Growing businesses can upgrade to Standard or Premium for unlimited invoicing, multi-currency support, and deeper integration with payroll and inventory.

How Do I Invoice in Xero? Quick FAQs

Can I send invoices from my phone?

Yes. The Xero accounting app (available on iOS and Android) lets you create, approve, and dispatch invoices on the go. You can also capture receipts and reconcile bank transactions from your mobile device, so you stay on top of your billing wherever you are.

Does Xero support multi-currency invoicing?

Yes. On the Standard and Premium plans, you can bill clients in over 160 currencies. The platform handles exchange rate conversion and tracks gains or losses in real time — ideal for businesses with international clients.

What is the best invoicing software for the UK?

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

Can I import invoices from another system?

Yes. You can import invoices and bills via CSV upload, which makes migrating from other accounting software straightforward. The platform maps your data for you, so the switch does not mean starting from scratch.

How do I set up payment terms?

In your settings, you can define default payment terms that apply to every new invoice. Options include specific day counts (7, 14, 30 days) or end-of-month terms. You can also override the default on individual invoices when needed.

How does Xero handle overdue invoices?

The dashboard flags overdue invoices automatically and shows you how many days each one is past due. Combined with automated email reminders, this ensures nothing slips through the cracks. You can also generate aged receivables reports to identify persistent late payers and adjust your billing terms accordingly.

Simplify Your Invoicing With JacRox

Getting your billing workflow right from the start saves hours every month and keeps cash flow healthy. At JacRox, we help businesses across Manchester set up and automate their invoicing — from invoice template design to payment gateway integration.

Whether you are new to the platform or want to run your business more efficiently with the accounting software you already use, our certified team can help you simplify every part of the process. Check out our bookkeeping guide for more tips, or get in touch for a free consultation.