How To Invoice Clients Using Xero


Invoicing as soon as possible for products and services provided should be a high priority within your business. Invoice management will be a crucial part of your business – as they say, cash flow is king and you can’t get paid if you have not invoiced!


While creating and sending invoices may not be the most fun activity to do, you can make it a lot easier on you and your business with the right tools. Closing the gap between the time you have delivered the product or service and sending the customer an invoice, reduces the risk of non-payment.


Before we get started on how to create an invoice in Xero, it’s best to understand how to add invoices into your workflow and simplify your processes.


Getting to know your workflow

In general, most small businesses will have a basic workflow as follows:

  • Gain new customers and clients or wait for new customers (depending on your business, the way you gain clients will vary)
  • Agree to sell your products or services to them 
  • Fulfil your sale to the customer/client
  • Receive your payment

As you can imagine, this is a general guide to business workflow. Depending on your business, your service and your product, this workflow can be quite different from that of another business. There will also likely be various challenges associated with each step of your workflow. 


When to send your invoices

You might be wondering when to send your invoices and ask other businesses about their procedures. While that might give you a good guide on how invoicing works, it’s important to understand your own business and your needs. 

 Three important questions to ask yourself are:

  1. Why am I sending an invoice?
  2. When do I want to receive payment?
  3. What is the most efficient way to achieve that?

The first two questions are easy to answer, but it’s the third question that will help you the most. This is where you’ll utilise your knowledge of your business, your industry and your procedures to know the best way of invoicing your customers. 


How to use Xero to send invoices

While you can send invoices using good old fashioned pen and paper, or even word processing software, there is a better alternative. You can utilise cloud-based accounting software such as Xero to help you with all of your invoicing needs. 

Before creating the invoice, make sure your client or customer is aware of an invoice being prepared. If they aren’t aware that they’ll be invoiced for the work or services you provide, they may be slow to pay and may even be annoyed at receiving an invoice. When doing business with them, explain your invoicing process so that they know when to expect one from you.

Using an invoice template which includes all the standard information from your business can help make your life a lot easier. If you’re utilising Xero for your invoicing needs, Xero offers a free template to help you get started. Be sure to include basic details such as your contact details. 


The main steps to creating your invoice

Now that you have a template to help keep your invoicing simple, it’s time to ensure your latest invoices are accurate and contain the right information. The main steps to creating your invoices include:

  1. Start with your invoice template
  2. Update the dates on the invoice, such as the date of issue
  3. Add the invoice number (this is a unique number for your client/customer so it is easy to refer to a specific invoice number if/when required). Most accounting software can automatically generate this.
  4. Complete the customer’s details such as name, business name (if applicable), address and reference number.
  5. Add a description of the product or service you have provided to the client.
  6. Total all of the costs on your invoice and double-check your working out.
  7. Make any changes to payment terms if required.
  8. If required, get approval for your invoice before sending it.
  9. If you are using a spreadsheet or Word document to create your invoice, be sure to save it as a PDF file. This will safeguard your invoice from being altered and protect you from fraud.
  10. Send your invoice and file a copy for your own tax records


Benefits of using cloud-based software for your invoicing

Gone are the days where you’re printing off invoices and posting them to your clients. You can save a lot of time and effort by using your accounting software that has invoicing built into the features. 

Cloud-based software gives you the added benefit of being able to access your data from anywhere. Whether you’re in the office, at home or on a beach somewhere, having access to your invoices via your software means you have the flexibility to do your work when it is best for you. 

Depending on your software, you may also be able to set up automatic invoicing. This is especially useful for clients who are paying you on a permanent/semi-permanent schedule. You can set up the automatic invoice, known as a ‘repeating invoice’ in Xero, to be sent and you don’t have to do a thing.

Online invoicing also allows you to see who has paid quickly and easily. Better invoice tracking also means an easier way to run your business and manage your cash flow.

Invoicing your customers and getting paid as quickly as possible is an ideal situation for any business. Not only can you manage your business easily, but you can offer your clients a simple way to pay their bills and pay you for your services. 


If you’re in need of assistance with your cash flow or are looking for a professional bookkeeper in Brisbane, Diverse Business Consultants are here to help. We are Xero experts and can help you with our Guardian Service, Xero training (so you can create those invoices with ease) or complete bookkeeping service. Get in touch with us today to discuss your needs.