Welcome to the Fit Small Business Xero training course. In this lesson, we're
going to cover how to invoice a customer in Xero. To follow along with me, log in
to your Xero account now or click the link below this video for a free 30-day
trial of Xero. You can also click this link to access our full Xero course and
other helpful resources. Let's get started. One of the most challenging
aspects of running a business is the ability to keep track of your income and
expenses. A key advantage to Xero is the ability to create professional invoices/
In addition to getting paid faster, this makes it much easier to see who's paid
you and who has not. Here's just a few of the benefits to creating invoices in
Xero. Customers can pay via credit card or ACH directly on the invoice.
It provides your customer with the details of the products and/or services they
have purchased on a professionally formatted document. In the How to Set Up
Invoices lesson we showed you how to customize your invoices by selecting a
branding theme or template and adding your company logo. You can click here to
access this lesson. You are able to assign the account that you want to
track the income when you create the invoice, so that Xero can perform the
accounting for you in the background. And finally your accounts receivable balance
is always up to date. In this lesson we'll walk you through the steps to
invoice a customer. This will include how to modify invoices, how to invoice a
group of customers for the same products and services, and how to create a
repeating invoice for those customers who you bill on a periodic basis
for example monthly or quarterly. To create an invoice for a customer in Xero
you want to go ahead and navigate to the accounts menu and select sales. From this
screen you want to go ahead and click on the new button and select invoice.
Now let's talk about the information that we need to provide in each of these
fields to create a new invoice. In the To field from the drop-down you want
to go ahead and select a customer that you would like to bill. If the customer
does not exist, Xero will add the new customer to your contacts list if you
just click on add new. The date field will automatically populate with today's
date. If you'd like to change the day you can simply click the drop-down and
select the appropriate date. The due date will automatically populate based on the
default due date setup in the How to Set Up Invoices lesson. However, if you need
to change the due date you can also do that here by clicking on the drop down
and selecting the appropriate due date. The invoice number field will
automatically populate with the next available invoice number. This is in
order to avoid duplicate numbers. To learn more about how to customize the
starting invoice number, view our lesson on how to set up invoices. You can click
here to access this lesson. If applicable, you can enter additional information
about the sale such as a purchase order number as we have done here. Branding:
this field will automatically populate with the branding theme or template that
was selected during invoice setup. If you would like to use a different branding
theme, you can simply click the drop-down and select the appropriate one.
This attach file icon allows you to attach documents such as signed
contracts, pictures, or other documents that you would like to attach to this
invoice so that you can keep them for internal purposes only. You can also
allow your customer to view these documents when they view their invoices if
you'd like. Item: if you are billing for an item that you frequently use, then you
can select it from the drop down menu here. And then as you will see or just
saw all of the information will populate for you.
So description will automatically populate based on the item that you
selected here. You can leave the description here or you can actually
make changes as you need to. For the quantity here you want to make sure that
you bill the appropriate quantity if you're selling products, for services you
want to enter a quantity of 1. The unit price field will automatically populate
based on the price that was setup for the item. If the pricing that you'd like
to bill is different from the default, you can adjust it in this field directly.
Discount percentage: if there is a discount that you would like to apply
you can go ahead and enter that here. If you set the customer up to automatically
receive a discount, this field will automatically populate for you. Account:
this field will automatically populate based on the item that was selected.
However, from the drop-down you can also select an account that you would like
for this to be coded to. In the tax rate field this will automatically populate
based on the item that was selected. However you can select a different tax
rate from the drop-down if you need to. Be sure to check out the Sales Tax Rates
lesson to learn more. You can click here to access this lesson. The region field
is actually called a tracking category field. In the invoice setup lesson we
discussed how to track other areas of your business like location, department,
or region as in this example. You can click here to access this lesson.
Xero will automatically calculate the amount for you by multiplying the quantity by
the unit price field. Please note that if you need to bill a customer in their
native currency, you can do so. Be sure to turn on the multi currency feature to
have this option show up when creating customer invoices. You can click here to
access this lesson. If you need to add a line item you can do so by clicking
this button here. Once you have completed all of the fields
you can click the Save button here or the approve button. The save options here
are very similar to what we discussed in the previous lesson. You can save as a
draft: this option will save your invoice and allow you to close out of the screen.
The save and continue editing this option will allow you to save your
invoice before you are done with it. You can say periodically so that you
don't lose information. You have an option here to save and submit for
approval, so that will save the invoice and then submit it to the person that
approves invoices in your organization. And then finally save and add another:
this option will save your invoices as a draft and then it will open up a new
blank invoice for you to complete. So this can be convenient if you've got
several invoices that you need to go ahead and enter into Xero, either for
multiple customers or the same customer. For the approval, if you have the ability
to approve then you will see this green approved button here. And let's talk
about the options available there. So the first option approve, this option will
save your invoice and you can send it via email to your customer. The next
option approve and add another: this option will save your invoice as approved
and it will open a new invoice screen for you to create another invoice. This
feature allows you to create invoices much faster because you don't have to
close out of the screen to create the next one. Approve and view next: this
option allows you to approve the invoice and then view any invoices that may be
awaiting your approval. In the How to Invite Users to Xero we discussed how to give
users permission to approve invoices. You can click here to access this lesson.
And finally approve and print: this option will approve the invoice and allow you
to print it as well. So we'll go ahead and approve this invoice, and then as you
can see we've got a notification that the invoice was approved. At which time
we can actually go in and add another invoice if we'd like.
After approving the invoice we can go ahead and email it to our customer by
clicking this email option here. So let's do that.
And then you will see an email template similar to this one pop up on
the screen. So in the To field you want to include the email address of the
person or persons who should receive the invoices. As indicated here you can
include more than one person, you just want to make sure to put the semicolon
in between the email address for each person's email address that you enter
here. The subject is automatically populated by Xero but as you can see you
can type directly in this field and make any necessary changes that you'd like to.
The body of the invoice is the same in that you can keep the standard messaging
that you see here, or you can make changes to it.
Notice here that a link to the actual invoice will be included with the email
so that the customer can access the invoice online. And they also can pay
directly online by clicking that link. Right below the body of the email
message we've got four options here. The first one says include files as
attachments. If you have attached files to this invoice and you would like to share
those files with your customer, put a check mark in this box. Otherwise you can
leave it blank if the file attachments are for your internal use only.
The second option here include PDF attachment: if you would like to attach a
PDF version of the invoice in addition to the online version of the invoice so
that the customer can download and save the invoice to their computer, you can
click this option to include a PDF attachment of the invoice. The third
option here mark as sent: by selecting this option Xero will mark this invoice
as sent to your customer. This will help you to keep track of the status of the
invoice so I highly recommend that you have this marked automatically for you.
And then the last option here similar to what we talked
about in the last lesson, you can be copied on the email that is sent to your
customer with the invoice by selecting to send me a copy option here. And then
once you've made all of your changes you want to go ahead and click the green
send button and your invoice will be sent to the customer. Please note that
one of the features that makes Xero stand out from its competitors is Xero
to Xero. If you have a customer or supplier who also uses Xero, you can
easily send and receive invoices without emailing them. For step-by-step
instructions on how to send an invoice to another Xero user, click the link
below this video. Xero makes it easy to make changes to an invoice if you need to.
So let's go ahead and return to our invoices by going to the accounts,
and sales. And then you should see invoices here and we've got four groups
here that invoices fall into: draft, awaiting approval, awaiting payment,
and overdue. Alright so let's talk about the draft invoices. Draft invoices are
invoices that you created but you have not approved them or submitted them for
approval. So please note that invoices in this group have no impact on your
financial statements. Awaiting approval: these invoices have been submitted for
approval but they have not yet been approved. Please note that the invoices
in this group do affect your financial statements. Awaiting payment: the invoices
in this group have been sent to customers but have not been paid yet.
Please also note that these invoices do affect your financial statements.
And then finally overdue: these are invoices that have been sent to customers and
they have not been paid as of their due dates, which makes them overdue or past
due. In the How to Create an Accounts Receivable Aging Report lesson I will
share some tips with you on how to stay on
top of your accounts receivable balances. You can click here to access this lesson.
Notice down here we've got a section that says money coming in. So what's nice
about this is you can click on a particular bar actually hover over a
particular bar as well to see the customer and the dollar amount for each
section of the bar graph. You can also click on the bar graph and
it will actually display the invoices that make up the amount shown here.
Customers owing the most: this can also be very helpful this will allow you to
easily pinpoint those customers who for example have past due or overdue
balances as indicated in red here. And so what you'll notice is that the overdue
balance amount here actually is made up of balances that are outstanding for
these three customers here. So it makes it pretty easy to quickly hone in on
what customers you need to pick up the phone and make a phone call to, or perhaps
send a friendly reminder to as well. To modify an invoice you want to go ahead
and click on the group that the invoice falls into, and then from this screen you
can actually just click on the invoice that you want to make changes to.
Anywhere in the row will actually allow the invoice to display. And once you do
that we've got our invoice options here, things that we can do outlined here
listed under invoice options. So let's talk about each of these. Online payments:
you want to select this option to add a payment service to your invoices which
will allow customers to make online payments. To learn how to set up a
payment service, check out our How to Customize Invoices lesson. You can click
here to access this lesson. Repeat: Xero allows you to create recurring
transactions like invoices and bills. For example if you have a customer that
you bill a hundred dollars on a monthly basis, you can set up the invoice as a
repeating invoice in Xero so that it will automatically
be created for you an emailed to the customer. Click the link below this video
for more information on recurring transactions. Third option here is void.
If for some reason you want to get rid of an invoice that was previously
created, you can generally delete it as long as it is in a draft or awaiting
approval status. However if the invoice is awaiting payment or has already been
paid, then you will need to void it. Please also note that you will need to
remove payments and credits applied to an invoice before you can actually void the
invoice. Click the link below this video for more information.
Copy to: you can create a brand new invoice, quote, purchase order, or bill
from an existing invoice . Just click the copy to button, select the form you would
like to create, and enter the customer or supplier contact's name. Edit: select the
edit option to make changes to the quantity description or any information
on the invoice. And then be sure to save your changes. Add a credit note: if the
customer has an outstanding credit note that you would like to apply to an
invoice, click this button and select the appropriate credit note to apply. Share
invoice: you can share a link to an invoice that is either awaiting payment
or in a paid status. Click this button to see a URL that you can copy-and-paste
into an email to send to your customer. And finally turn invoice reminders off.
Xero makes it super easy to manage your accounts receivable with the
automatic invoice reminder feature. In the How to Set Up Invoices lesson we
show you how to turn on payment reminders to your customers so that they
receive a notification a few days before an invoice is due, or after the due date.
You can click here to access this lesson. This feature shown above allows you to
turn off automatic reminders for an invoice if for some reason you need
to do so. Xero allows you to group your customer contacts that have something in
common. For example you might group customers using the same invoice to.
So for example Acme Web Pros Plus would like to create an invoice for a group of
customers who are billed $300 each quarter for digital marketing services.
So let's go ahead and walk through the steps on how we would do this in Xero.
From the Xero dashboard go ahead and select accounts, and sales. Click on our
new button and we'll go down and select repeating invoice. From the new repeating
invoice button go ahead and select quarterly customer billing. If you have
not set up the group yet, then you want to go ahead and do that by clicking on
add contact group and then you can come back and set up there repeating invoice.
Okay once you do that the invoice template should display and you want to
complete all the required fields of what you want to bill your customers for.
Like we have done in this screen. Once you have done that go ahead and click the
create draft invoices button here. So we'll go ahead and do that. And as you
can see here it says that three draft invoices were created for a quarterly
customer billing. And so as you can see we've got our three invoices here that
were created. At this point we could actually mark these invoices and go
ahead and approve them if you have the ability to approve invoices. Otherwise
you would submit them for approval. That wraps up the lesson on how to invoice a
customer in Xero. To access our full Xero course or any of the other lessons in
this series click this link. You can also find a link below this video for a free
30-day trial of Xero. If you have feedback about this course or if you have any
questions, please leave a comment below. Also don't forget to subscribe.