Go to Sales, Invoices, New invoice. Choose the contact, add your lines, check the dates and click Approve & email.
If you are VAT-registered, the invoice must also meet SARS's tax invoice rules. Xero handles most of them once your settings and contacts are right. The checklist below shows what to confirm.
Every sale goes through Xero as an invoice, even if the customer pays upfront. That way your sales, debtors and bank all agree.
Create a quote (optional)
- Go to Sales, then Quotes, then New quote.
- Choose the contact, add the items, quantities and prices, and set an expiry date.
- Send it. Once the customer accepts, mark it Accepted and turn it into an invoice from the quote. No retyping.
Create and send an invoice
- Go to Sales, then Invoices, then New invoice.
- Choose the contact. Check the issue date and the due date.
- Add each line: item or description, quantity, unit price, account and tax rate. Saved items fill these in for you.
- Use the default tax rate unless you know this line is different. See which VAT rate to pick.
- Add a reference, such as the customer's order number.
- Click Preview to see what the customer will get.
- Click Approve & email to send it. Use Save as draft only if someone else must check it first.
What a South African tax invoice must show
This applies only if your business is registered for VAT. A customer who is a VAT vendor can only claim the VAT back if your invoice is a valid tax invoice. If it isn't, expect a call asking you to reissue it.
The VAT Act sets two levels. Invoices for more than R5,000 (including VAT) need the full set. Invoices for R5,000 or less can leave out the customer's details.
| What must appear | Over R5,000 | R5,000 or less | Where Xero gets it |
|---|---|---|---|
| The words "Tax Invoice" | Yes | Yes | Invoice branding theme title VERIFY |
| Your name, address and VAT number | Yes | Yes | Organisation settings |
| Customer's name, address and VAT number | Yes | No | The contact record |
| Unique serial number | Yes | Yes | Xero's automatic invoice number |
| Date of issue | Yes | Yes | Issue date |
| Full description of the goods or services | Yes | Yes | Line description |
| Quantity or volume | Yes | No | Quantity column |
| Value, VAT amount and total, or a VAT-inclusive total with the rate stated | Yes | Yes | Tax rate on each line |
Never change Xero's invoice number by hand to "fill a gap" or reuse a number. SARS expects one unique serial number per tax invoice. A voided invoice keeps its number, and that is fine.
A tax invoice should be issued within 21 days of the supply. Only issue one tax invoice per supply. If the customer asks for another copy, send a copy, not a new invoice.
Fix a mistake
| Status | What to do |
|---|---|
| Draft | Edit it freely. |
| Approved, not yet paid | Open it and choose Edit, or void it and start again. Only void an invoice that was never valid. |
| Already sent to the customer | Issue a credit note for the wrong amount, then a new invoice for the right one. This keeps a clear trail for the customer and for SARS. |
Repeating invoices
For the same charge every month, such as rent, retainers or subscriptions, set up a repeating invoice under Sales, then Invoices, then New repeating invoice. Choose how often, the start date, and whether Xero saves it as a draft, approves it, or approves and emails it.
Record a customer payment
The best way is to match the payment on the bank reconciliation screen. Xero links the money in your bank to the open invoice.
If you need to record it by hand, open the invoice, scroll to Receive a payment, enter the date, amount and bank account, and click Add payment. Don't then also code the same money on the reconcile screen. That counts the income twice.
Ask customers to use your invoice number as their payment reference. South African bank references are short, and a clear one lets Xero suggest the right match.
Chase what you are owed
- Sales overview shows invoices that are overdue.
- Run the Aged Receivables report each week to see who owes what and for how long.
- Send a statement from the contact, or from Sales then Statements.
- Turn on invoice reminders in invoice settings so Xero emails customers automatically when an invoice is overdue.
Most VAT vendors pay VAT when they invoice, not when the customer pays. An unpaid invoice can still cost you VAT. That is one more reason to chase debtors weekly.