Invoicing is one of the most important tasks in any business. At the same time, it’s also one that brings very little value to the table, is extremely repetitive, and requires extreme diligence. 

After all, each invoice needs to have very specific details (customer data, seller information, line items). And, any mistake on your invoice can turn out to be very expensive – especially if it affects your business accounts. Thankfully, that’s where automation can help you! 

And, considering that Xero is one of the most popular accounting tools for small and medium businesses – let’s look at how you can leverage Xero and Zapier to automate your invoicing.

What Is Xero – A Quick Intro

Xero is one of the leading accounting software companies for small and medium businesses.  Its flagship cloud-based product – Xero – is used by millions of customers, particularly in countries such as the United Kingdom, United States, Australia, and New Zealand – the latter being the company’s home country. 

The tool allows its users to easily create new invoices and send them to customers. Companies can also easily track payments for different products or money flowing into different customer accounts. 

Other features include comprehensive reporting, balance sheets, easy profit & loss tracking, as well as VAT returns. Users can also track bills to pay, and send quotes or reminders (automated) about unpaid invoices to their customers. 

Of course, while Xero boasts quite a few neat automations – to fully benefit from invoicing automation, you want to connect it with an integrator platform such as Zapier. So, how (and why) should you integrate Xero with Zapier? Let’s take a quick look! 

Why Automate Your Invoicing with Xero and Zapier – The Benefits

Managing invoices (and, thus, documenting expenses and revenue) is one of the key tasks in every business. Depending on the number of sales that you get – it can also be extremely time-consuming. Just ask your accountant – I’m 100% sure they’ll agree! 

After all, every business is required to stay on top of their taxes – trying to mislead the IRS is one of the biggest mistakes you could make. But it’s not just the IRS that will chase you if you don’t have your invoicing in order. Many customers, especially business customers, need those purchase invoices to save on taxes themselves. And they want them fast and without any errors. This is where automating Xero with Zapier can help you:

  • The automation can create an invoice the moment someone buys your product or service.
  • By automating invoice generation, you minimize the risk of mistakes. And, according to Gartner, 18% of accountants (almost one in five) make at least one mistake A DAY
  • Xero Zapier integration allows you to create invoices without payments, which means you can easily manage both paid and unpaid orders.
  • When someone makes a payment, Zapier can not only generate an invoice, but also calculate taxes and assign the payment to the right account, keeping your finances in order. 
  • This, in turn, helps you manage finances more efficiently. By allocating all payments correctly, you can have reliable financial data which you can then use to spot trends, understand cash flow changes, and plan for the future.
  • Connecting Xero to Zapier also allows you to send all new invoices straight to your customers. This helps improve customer experience and saves both you (or your customer service) and your customers plenty of time.
  • Lastly, you can automate client reminders and other communication related to your invoices, which increases the chance that you’ll get paid on time! 
a quote emphasizing benefits of using xero with zapier

Of course, there are many more benefits to connecting Xero with Zapier than the ones listed above. Even just automating payment creation and sending new invoices can give you a nice overview of who’s already seen and paid your invoice. All that without you having to lift a finger: 

invoice delivery status confirmation in xero

Just imagine how much time you can save by automating that one thing. And the more invoicing tasks you automate – the more money you’ll save! Of course, to reap those benefits, you first need to set up an invoicing automation workflow – and you have to do it the right way! 

What to Look Out for When Automating Invoicing?

Every time you’re setting up an automation workflow, you want to be extra careful. You must outline the entire setup, understand the data flow, and think of any scenarios that come with an increased risk of an error. When it comes to automating accounting, both the stakes and the risks are high. 

When automating repetitive, mundane tasks, or even things such as project management with Zapier and Asana, there’s always a risk that something breaks. However, the misconfiguration doesn’t always lead to big consequences. Sure, the closer you get to communicating with clients, the higher the risk. But then it’s easy to spot the mistake (or your customers will tell you about it). 

However, if you misconfigure an accounting workflow, it’s easy to miss the mistake. And the more times the workflow runs, the more inaccurate your accounting data will be. This, in turn, may lead to errors in your company’s tax returns, which can even be penalized by the taxman! 

Thankfully, there are a few things you can do to reduce the risk of your Zapier Xero workflows running into issues. Key things to keep in mind include:

1. Always Try to Use a Line Itemizer

For example, if you’re creating invoices for several different products, it’s important to know that Xero accepts line items. Configuring Zapier Formatter Utilities Line Itemizer helps you arrange and send the data to Xero. It also gives you more control over the data that you’re sending to Xero, as well as testing. Still, it won’t configure itself. 

When you are choosing the data to send to the line itemizer, pay special attention to accounts, item codes, taxation, and pricing. Note that even if some values can be filled manually, it’s still recommended to use a line itemizer to group them:

Xero line items inside Zapier workflow configurator

2. Use a Sub-Zap for Complicated Calculations

Another thing you should be aware of is that depending on your product and service, you may have to split customer payment into different parts to invoice it properly. Then, those different sub-products may or may not have tax associated with them. 

If your Zap has to perform complex calculations, it’s best to take those calculations out of your workflow and move them over to a Sub-Zap. Then, just grab the results received from a Sub-Zap and add them to your line itemizer step. 

3. Make Sure to Add All Xero Zapier Steps

Xero is a complex Zapier app. To properly add a new customer, create an invoice, add a payment, and send the invoice to the customer, you may need three, four, five, or even more steps! That’s why you should always double-check if your workflow does everything you need it to do – and that the invoice you’re creating has all the necessary details. 

Of course, as mentioned earlier, this also entails carefully configuring your line itemizer and any other steps that send data to your Xero account.  

sample xero zapier workflow - generating and sending a sales invoice

4. Check If You’re Sending Your Invoice to the Right Email

Next, you may run into a situation where you need to send certain invoices to a different email than that of your contact. This is often the case if you’re a subcontractor for another company. 

It’s important to note that Zapier will always send the invoice to the email specified in the “Create Sales Invoice” step. In this case, you may want to configure your workflow to switch the email as it runs. How to do that?

First, you want to create or update a contact in Xero with your business partner’s main contact data. Next, you want to create and send an invoice to the email of their client. Lastly, you want to update the contact back to your partner’s email right after the workflow runs:

sample xero zapier workflow - updating xero contact after invoice generation is finished

5. Don’t Mix Up the Invoice Number with Invoice ID

Lastly, a quick tip. When configuring steps responsible for sending the invoice or adding payments, you will be asked to add an invoice number. But, don’t let Zapier fool you. Most of the time, what you need to add is Invoice ID – what’s the difference? 

xero zapier email step setup

Invoice number is the number you’re using for accounting purposes. Whereas invoice ID is the internal, long number that allows Zapier to find that particular invoice. In most cases, you should be looking for that ID. Providing Zapier with an actual invoice number may cause those steps to fail. 

Of course, just because the setup may require you to be extra careful, that doesn’t mean you should be scared of automating your invoicing with Xero and Zapier. Just remember to test your configuration carefully and keep an eye on each automation run – especially in the very beginning. You may also want to add a separate Zapier step to create a log of all transactions or connect your Zapier workflow to Slack to ping your team on each new transaction invoiced.

How to Connect Xero to Zapier and Build a Workflow

Now that you know that you shouldn’t be scared to connect Xero to Zapier, it’s time to look at how you can do that – starting with Xero Zapier Triggers. 

Zapier Xero Triggers

The available Zapier Xero triggers let us fire automation workflows for all key events we could expect from small business accounting software. These include the following: 

sample xero zapier triggers
  • A New Bank Transaction. This will start the workflow whenever there’s a new bank transaction in the system. A sample use case includes an automation that sends transaction data to an external finance tracking system. 
  • A New Bill. This will trigger the workflow whenever you create a new bill. Useful if you want to automatically add bills to a third-party database (or want to add a note about the bill being created to a CRM). 
  • A New Contact. This will trigger the automation each time you create a new Xero contact. You can use it for example to keep your CRM in sync with Xero. 
  • A New Expense Claim Receipt. This will start the workflow each time you add a new expense claim receipt. It helps you keep your expense data in sync with external systems. 
  • A New Payment. This trigger starts the automation whenever you receive a new payment. It helps you stay on top of all the money you’re receiving in your business. 
  • A New Quote. This will trigger the automation whenever you create a new quote. You can filter between different quote statuses (draft, sent, declined or accepted, invoiced, and deleted). Example usage includes keeping track of quotes in your CRM. 
  • New Sales Invoice. The last Zapier Xero integration trigger starts the workflow each time you create a new sales invoice (for accounts receivable). Use this trigger to keep track of sales invoices and their status – you can choose to start the automation for all, draft, voided, paid, or awaiting approval invoices. 

As you can see, there are plenty of Xero Zapier triggers to play with and create a wealth of automations. Now, let’s take a quick look at the different Zapier Xero actions.

Zapier Xero Actions

Xero boasts several top-notch Zapier actions that allow you to almost completely automate your business invoicing. All but a few allow you to create one of the many different accounting documents. Here’s the list:

sample xero zapier actions focused on creating documents

Add Items to Existing Sales Invoice. This step allows you to add line items to an existing invoice. Of course, you may have to find the invoice before editing it.

Create Bank Transactions. This step helps you automate the logging of your bank transactions (either spend or receive) to stay on top of incoming payments. This is especially convenient if you’re charged any kind of fees, for example when processing Stripe payments. 

Create Bank Transfer. Need to log a bank transfer? With this Zapier Xero step, you can make sure your bank data is up-to-date, even if you move money between different accounts. 

Create Bill. This automates the creation of (account payable) bills. 

Credit Note. This Xero Zapier action allows you to create a credit note for your Xero automatically. 

Create a New Quote Draft. While Xero is primarily an accounting software, you can use it even in your pre-sales process. With this step, you can easily create a new Quote draft. 

sample xero zapier actions focused on creating and sending documents

Create Payment. This step lets you automatically tag the invoice as paid, helping you keep your accounts in order. And, if you use the last step in the list – it lets you send a properly issued invoice to your client.

Create Purchase Order.  Does exactly what it says – creates a new purchase order for your contact. 

Create Sales Invoice. Just as straightforward as the previous step which lets you create a Sales Invoice. One of the most “popular” steps in Xero-based workflows 🙂 

Create/Update Contact An essential step for keeping your Xero CRM up to date. As discussed earlier, it can also be used to manipulate contact information dynamically in the workflow.

Send Sales Invoice by Email The “final” Xero step of most workflows allows you to send your sales invoice straight to your customer. No need to add your email provider to the mix – Xero handles delivery using its servers.

As you can see, there are quite a few Xero triggers and actions that you can choose in Zapier. Now, let’s take a quick look at the practical examples of Xero Zapier automation workflows.

3 Xero Zapier Workflows to Automate Your Accounting

The majority of Xero Zapier use cases involve invoicing transactions. But that doesn’t mean that you cannot design a workflow to automate other business operations at the same time. Let’s take a quick look at three sample Xero Zapier workflows.

1. Long Lead Sales Cycle: Paid Discovery Onboarding

Let’s assume you’re selling a high-ticket service – web design, SEO services, or Airtable database development. Depending on the size of the project, you might not be able to close the deal in one call. And it’s not because you don’t know how to sell. Rather, you first need to scope out the project and understand customer needs. In this case, you first want to offer your client a workshop or paid discovery session. 

Now, where to put Xero into the mix? In a simple setup, we can break the workflow into two Zaps (or Make scenarios, if you’re working with the latter). 

First, we want to use the Typeform Zapier trigger to send Typeform data to our Zapier workflow. Next, automation will create a new task in Asana (to process the lead) and also add that lead to Pipedrive. 

A sample automation workflow with Typeform, Asana, and Pipedrive

Next, we wait for the deal to get qualified. And, once they are – and the deal reaches the “Discovery Qualified” stage, Pipedrive Zapier trigger will start workflow #2. In this automation, we will process their data and start adding them to our system.

a Pipedrive-triggered workflow that creates a new customer profile for qualified leads

In step #2, Zapier creates a Xero customer profile. It then adds a new task for the team, to prepare for the Paid Discovery session. Lastly, we add the client to Active Campaign and create a new folder with Paid discovery materials. 

Of course, there’s a lot more we could do here than what’s shown in those simple workflows. For example, with Zapier filters, we could limit them to specific leads coming through Typeform. The more we can streamline new lead processing, the faster we can focus on customer engagement, and the better experience we can provide. 

2. Lead to Cash Cycle Automation (Pipedrive, Xero, Salesforce, Slack)

In the second example, we trigger the Zapier workflow when the new Pipedrive deal gets closed.

A Pipedrive workflow with Xero used to generate and send invoices

In the next step, we begin an end-to-end post-sales processing of payment and simple onboarding:

  • We create or update a Xero customer
  • We create a new invoice
  • We then email that sales invoice to the customer

All three of the above are done with the Xero Zapier integration.

Next, we find and either add or update the customer in ActiveCampaign (or any autoresponder that we use. This ensures that our segmentation is up-to-date at all times.

Lastly, we notify the team that there’s a new customer closed. We can either send a chat message or, if we know who to reach, we can send a direct message to the right person. 

Room for improvement: One of the things we could implement here is a step where we add a record in Airtable to create an Airtable-based single source of truth. This, in turn, would allow us to keep all the relevant data in one place. 

3. Multi-Step Payment Processing with Notifications and Log

Of course, Pipedrive is not the only tool that can trigger a Xero-based Zapier workflow. This workflow fires the moment we receive a Stripe payment and uses the Stripe Zapier integration

A robust Stripe workflow with different Xero invoicing steps

And what happens once the payment is received?

First, let’s look at Xero’s steps:

  • First, we create a new contact in Xero.
  • We then create a new sales invoice.
  • Next, we add a payment to our Xero invoice. This step is critical as we just collected money from one of our customers.
  • Lastly, we email that invoice to the customer.

The next steps will depend on our goals. In this example, we leverage a Gmail Zapier integration to send a welcome email. Next, we use the Slack Zapier integration to send a notification to the customer success team. Lastly, we add a log with transaction details to a dedicated Airtable table.

This workflow automates both accounting updates and payment tracking. And, with Slack and Gmail in the mix, the workflow provides real-time notifications for both customers and the team.

Connect Xero to Zapier to Automate Your Accounting

Of course, the above workflows are very simple. Often, when automating invoicing, you need to use Zapier to perform additional calculations, create additional filters, and connect a number of other tools. But, if you get this part right, a Xero Zapier integration can eliminate accounting mistakes and free up the time that you and your team can use to attract more customers!

Want to start automating your business invoicing and reporting? Learn more about Zapier automation or schedule a free discovery call to talk about your business. Find out how automation can help you get more control over finances in your business.

Jacek Piotrowski
Jacek Piotrowski

Hey, I’m Jacek. I’m the founder and Chief Automator at Clickleo.com

I’m on a mission to help you use automation to reclaim your time and achieve more in your business.

You can find out more about me – and why I started Clickleo – over on this page

Comments

Share on activity feed

Powered by WP LinkPress

Pin It on Pinterest

Share This