How to Create an Invoice in Xero (2026 Step-by-Step)

Quick answer: To create an invoice in Xero, open Invoices from the main menu (or use the + create button), click New invoice, choose or add the contact, set the issue and due dates, add line items with quantities, prices, accounts and tax rates, then approve and email it or save it as a draft. Customers can pay online if you connect a payment service.

Xero is one of the most popular cloud accounting tools for small businesses in New Zealand, Australia, the UK and the US, and invoicing is the feature most people use first. This guide walks through how to create an invoice in Xero step by step, the settings to configure before your first invoice, repeating invoices, online payments and the mistakes that cause trouble later. Xero changes its interface from time to time and menus vary slightly by region, so if a label below does not match your screen exactly, look for the closest equivalent or check Xero Central, the official help center.

What do you need before creating an invoice in Xero?

Ten minutes of setup makes every invoice afterward faster and more accurate. Before your first invoice, check:

• Organization details: legal business name, address, tax registration number (if any) and contact details.
• Invoice settings and branding theme: logo, layout, default payment terms, terms and conditions and the next invoice number.
• Tax rates: sales tax, VAT or GST rates that apply to your sales. US users may connect automatic sales tax; others choose from tax rates in the settings.
• Chart of accounts: at least one revenue account (for example, Sales or Consulting Income) to code line items.
• Products and services: saved items with descriptions, prices and accounts for things you sell often.
• Payment services: a connected card or bank payment provider if you want a pay now button.

If you are still choosing software, our comparisons of Xero vs QuickBooks and Xero vs Zoho Books cover pricing and features.

How to create an invoice in Xero: step by step

1. Open a new invoice. Go to Invoices (found under the Sales or Business menu, depending on your version of Xero's navigation) and click New invoice. You can also use the + create button in the top bar, or the keyboard shortcut listed in Xero's help.
2. Choose the contact. Start typing the customer name. If they are new, add them from the invoice screen and fill in the email address and billing address.
3. Set the dates. The issue date defaults to today. The due date follows your default terms (for example, 30 days after the invoice date) unless you change it.
4. Check the invoice number and reference. Xero assigns the next number automatically. Use the reference field for the customer's PO number or project name.
5. Choose the branding theme and currency if you have more than one (multi-currency is available on higher plans).
6. Add line items. Pick a saved item or type a description, then enter quantity, unit price, discount (if any), revenue account and tax rate. Xero calculates line totals, tax and the invoice total.
7. Decide how tax is shown. Choose whether amounts are tax exclusive, tax inclusive or have no tax.
8. Preview the invoice to see exactly what the customer will receive.
9. Save, approve or send. Save as a draft to finish later, submit for approval if your team uses approvals, or approve and email it in one step. The email includes a link to the online invoice, where customers can view, download or pay.

Once approved, the invoice moves to awaiting payment and appears in your receivables reports. If you prefer a quick, offline alternative for a one-off job, you can build the same invoice in our free invoice generator and download a PDF.

Worked example: a Xero invoice for a consulting project

A marketing consultant in Texas invoices a client for October work. Her default terms are 15 days, and her services are not subject to sales tax in this example (sales tax on services varies by state). Figures are illustrative.

Item	Description	Qty	Price	Account	Amount
STRAT	Marketing strategy workshop, Oct 7	1	$1,800.00	Consulting income	$1,800.00
HOURS	Campaign management, October	22	$95.00	Consulting income	$2,090.00
ADS	Ad spend reimbursed at cost	1	$640.00	Reimbursable expenses	$640.00
Total due by Nov 15					$4,530.00

Coding the ad spend to a separate account keeps her consulting revenue accurate in reports. The reference field holds the client's PO number, and the online invoice link lets the client pay by card.

How to set up repeating invoices in Xero

For retainers, maintenance plans or rent, Xero's repeating invoices save time:

1. From the invoices area, choose the option to create a new repeating invoice (often in the drop-down next to New invoice).
2. Set the frequency (weekly or monthly, with an interval), the start date, the due date rule and an optional end date.
3. Add the contact and line items as usual.
4. Choose what happens on each run: save as draft, approve, or approve and email automatically.
5. Save the template and check the first generated invoice before relying on automation.

Our recurring invoices guide covers when automatic sending makes sense and how to word recurring line items.

How do customers pay Xero invoices?

Method	How it works in Xero	What to check
Card via a connected provider	Pay now button on the online invoice	Provider's processing fees in your country
Direct debit or bank payments	Available through supported providers in some regions	Availability and settlement time
Manual bank transfer	Your bank details printed in the invoice terms	Reconcile the deposit to the invoice in the bank feed
Check or cash	Record the payment against the invoice manually	Deposit date and reference

Card fees are set by the payment provider. For context, see our guides to Stripe fees and credit card processing fees.

How to follow up on unpaid Xero invoices

• Invoice reminders: Xero can send automatic reminder emails a set number of days before or after the due date. Turn them on in the invoice reminder settings and edit the wording.
• Aged receivables report: shows who owes what and for how long; see our guide to accounts receivable aging reports.
• Statements: send customers a statement of all open invoices.
• Late fees: Xero does not add interest automatically in most setups, so if your terms allow late payment fees, add them as a separate invoice or line.

Editing, voiding and crediting invoices in Xero

Mistakes happen. The right fix depends on the invoice status:

• Draft: edit freely or delete.
• Awaiting payment, no payments: edit, or void if it should never have been issued.
• Partly or fully paid: remove the payment before editing, or issue a credit note for the difference.

Voiding keeps the invoice number in your records, which preserves an audit trail. For when to use each fix, see how to void an invoice and our credit note guide.

How to invoice in a foreign currency in Xero

If you bill clients abroad, Xero's multi-currency feature (included on higher plans) lets you issue the invoice in the client's currency while your reports stay in your base currency. The general process:

1. Turn on the currency you need in the currency settings.
2. On the new invoice, choose that currency from the currency selector.
3. Xero applies a daily exchange rate, which you can usually override with your own rate.
4. When payment arrives, Xero records any exchange gain or loss automatically when you reconcile.

Tell the client which currency you expect and who pays bank or conversion fees. Wire fees deducted in transit are a common reason international invoices end up a few dollars short.

Creating invoices on the Xero mobile app

Xero's mobile app lets you create and send invoices, check who has paid and record payments from your phone. It is useful for tradespeople who want to invoice on site before leaving the job. The app uses the same contacts, items and branding themes as the web version, so set those up on a computer first. For a broader look at phone invoicing, see how to make an invoice on your phone.

Common mistakes when invoicing in Xero

• Wrong tax setting: mixing tax inclusive and exclusive amounts changes totals and tax returns.
• Coding everything to one account, which makes reports useless for spotting which services earn money.
• Leaving invoices in draft, so they never appear in receivables and never get sent.
• Duplicate contacts for the same customer, which splits their history and statements.
• Deleting instead of voiding approved invoices, which leaves gaps in your numbering.
• Forgetting the PO number, a top reason large clients hold payment.
• Not reconciling payments, so paid invoices still show as overdue.

Xero vs a simple invoice generator

Need	Xero	Free invoice generator
Send a professional invoice	Yes	Yes
Bank feeds and reconciliation	Yes	No
Tax reports and accountant access	Yes	No
Monthly cost	Paid subscription (see Xero pricing)	Free
Account needed	Yes	No

Our article on invoice generators vs accounting software explains the trade-off in more detail.

Once your settings, items and tax rates are in place, knowing how to create an invoice in Xero takes only a minute per bill: choose the contact, add lines, check tax and approve. If you are not ready for a full accounting subscription, or just need a quick one-off invoice, try the free invoice generator. It needs no sign-up and builds a PDF in your browser that you can download and send right away.