In 2022 it really should no longer be a question of whether you use software for invoicing, but simply which product you use. Xero has emerged as one of the global leaders in Accounting, and Invoicing, software. Here are some tips on getting the most out of invoicing with Xero.
Simple, Logical Numbering
Having no agreed system for numbering your invoices can be confusing for your staff, and make you look unprofessional to customers. You can set the automatic prefix and sequence (ie: next number) in your organisation settings page:
Settings > Invoice Settings > Default Settings
To keep things simple, a set prefix (eg: INV) can be used, but you may choose to add more information to the prefix, such as date. Eg:
Some people like to take it even further, by adding a customer related prefix (eg: first 3 characters of the customer name). Eg:
Keep in mind that the more information you add, the more work you need to do to ensure it is being used correctly. Eg: By adding the year to the prefix, you need to make sure you update the default each year. If you want customer name included, you need to rely on staff manually editing the number, as this cannot be automated in Xero.
I’ll point out here that invoice searches with GetHarold can be done by both invoice number and contact name, reducing the need to add contact name into the invoice number.
Invoice templates are also found on the invoice settings page:
Settings > Invoice Settings
There are two main reasons to modify, or add your own, invoice templates:
- To make your invoices look professional (branding)
- To save your accounts staff time
Adding your own branding to the invoice templates (labelled Branding Themes in Xero) you use is simple, and gives your invoices a much more professional appearance. Click the Options dropdown for all invoice templates that are in use and choose the Change Logo option to update the logo with your own.
Copy pasting an address, or adding a needed column, to an invoice can seem like relatively minor tasks, but when repeated tens, or even hundreds of times, they add up. It slows your staff down, and also increases the chance of errors on invoices, a cardinal sin.
Make sure to review any in use templates/branding themes, to ensure that all required information is being included by default.
Bonus Tip: Regularly take the time to actually watch your staff create new invoices, so you can see if the templates are still appropriate, or whether they are using them correctly.
With GetHarold notifications, you can get notified in Slack every time a new invoice is created (or authorised) to allow you to easily spot review the quality of invoice data.
If you run a business with recurring payments that require sending of new invoices each time, setting up repeating invoices can save you time, and ensure that nothing gets missed.
You can create a repeating invoice from the New Invoice dropdown in Xero:
Creating the invoice is exactly the same as a normal (non repeating) invoice, but there is a key section at the top of the invoice form where you configure the repeating settings:
- Set the frequency that the invoice should repeat
- Set the initial invoice date (for the first repeat invoice)
- Configure the due date (relative to each invoice’s invoice date)
- Set an optional end date
- Configure the invoice’s status on creation (Draft, Authorised or Approved for Sending)
This last setting is key, as it determines what level of automation this repeat invoice will have. Some Xero users are nervous about invoices getting sent automatically without any manual oversight. If this is the case, or if you are just getting started with repeating invoices, you can choose to automatically create them in draft or authorised status. This way the time needed to create the invoice is still saved, but you can rest assured that a human will review before anything is sent to the customer.
Having the perfect process in place for creating invoices means nothing if you’re not getting paid. Staying on top of overdue invoices is key.
Setting up automatic email reminders to customers is a simple way to stay on top of overdue invoices. From the invoices page:
Business > Invoices
You can confirm whether they are enabled from the right most button in the header:
If, as above, Invoice Reminders are set to Off, you can turn them on by clicking the button and confirming the reminder settings:
Things to consider:
- Firstly, make sure you check the Email customers when an invoice is… checkbox
- Edit or add the reminder send dates. The default above has an email going out every week for three weeks
- We would recommend ensuring that the first two checkboxes remain checked, so that customers can confirm details and, more importantly, pay easily
- There is a final option to not send reminders for smaller amount invoices. In our opinion, if it’s owed, it’s owed, and should be followed up
How GetHarold can help
If you use Slack for work, GetHarold can make managing your invoices a whole lot easier.
Quickly and easily search invoices (by number or contact name) straight from Slack with the /harold command.
Use the /harold overdue command to instantly bring up all overdue invoices, and a quick link to the Aged Receivables report for more detailed information.
Set up (with no code) notifications to alert you in Slack when key changes are made to invoices. Eg: Set a reminder for:
- Any newly created invoice
- A change to invoice due dates
- When an invoice is paid
- A daily report on invoice stats (counts per status etc.)