Paying suppliers with Xero, your guide to invoice payments

by | Apr 30, 2024 | Xero

Your comprehensive guide to managing supplier invoice payments using Xero

We know how you feel; managing your business’s finances can be challenging and take a lot of your time, both in administration and processing. Efficient management of supplier invoices is crucial for maintaining healthy cash flow and ensuring that your business has a smooth operation. With cloud-based accounting software like Xero, handling bills and payments has become more straightforward than ever. In this comprehensive guide, we’ll walk you through the process of paying suppliers with Xero, sharing insights and top tips from our accounting team to streamline your invoice payment procedure.

 

Switching your accounting system to Xero 

Firstly, if you haven’t already switched to Xero to manage your business finances, then maybe you should! Xero offers comprehensive accounting functionality, cloud-based accessibility, and automation, streamlining financial tasks to improve your efficiency. Its integration capabilities provide a unified platform for managing business finances, while real-time insights enable you to make informed decision-making. So, if you are still using spreadsheets to keep on top of your accounting, then it is probably time for you to switch to something quicker, with less risk for errors.

 

Entering your business payments into Xero 

Unlike solely focusing on sales invoices, entering your purchases into Xero offers a holistic view of your financial status. This practice enables you to predict and plan around your cash flow effectively. As your bill entries grow, you gain insights into your expenditure patterns, allowing for informed decision-making and enabling you to plan your business outgoings.

 

Managing supplier invoices with Xero

Xero’s interface simplifies the process of managing your supplier invoices. Upon receiving an invoice you can click on the purchase overview page from the business menu. Here you can see a snapshot of your purchases.

You can easily create a new bill in Xero under the new bill option, where you can enter the bill date and due date. You can also categorise the payment to group these together into different types of cost.

The invoice then moves to the draft bill tab, where you can review and approve it, after this it will move to the awaiting payment tab. This helps you to minimise the risk of missed payments to your suppliers.

 

Planning ahead with scheduled payments

To stay on top of your payments and improve cash flow, Xero allows you to set up a schedule of planned payments. By accessing your list of bills you can view all outstanding bills and upcoming payments, providing you with a centralised overview of your financial commitments. This feature is particularly beneficial for businesses dealing with multiple suppliers and varying payment terms. Making your payment planning easy.

 

Recording payments in Xero

Once you’ve approved a bill in Xero, recording the payment is a breeze. Simply navigate to the payment tab, where you can choose payment method and enter the details of this transaction. Then all you need to do is confirm the payment.

 

Efficiency with batch payments

For businesses managing numerous suppliers, Xero’s batch payment feature is a game-changer. This functionality enables you to authorise multiple supplier payments simultaneously, saving your business time. With high transaction volumes, maintaining accurate records has never been easier. You can reach this section by navigating to business, then bills to pay, and proceed to the awaiting payment tab.

 

An advanced way to speed up your supplier payment process

Xero utilises advanced features, such as data capture automation through Hubdoc, to streamline the input of invoice data for supplier payments. With Hubdoc, documents and key data are automatically stored in Xero, reducing tedious manual data entry. Users can capture data from bills and receipts by taking photos, emailing, scanning, or uploading documents, with the extracted information used to create draft transactions in Xero.

Hubdoc syncs transactions into Xero automatically, matching them with bank feeds for reconciled payments. Supplier rules within Hubdoc can further automate your transaction creation in Xero, with original documents attached for reference. Hubdoc automates data entry by extracting details like supplier names, amounts, invoice numbers, and due dates, organising them into supplier folders for easy access and unlimited storage. This very clever integration empowers users to go paperless and access their documents anytime, anywhere, enhancing efficiency and organisation in invoice management for supplier payments.

 

Making supplier payments using Xero; the conclusion from our accounting team

Managing supplier invoices and payments can be a time consuming task for any business. But by using Xero for your supplier payments, it becomes a streamlined and efficient process. By leveraging its many accounting features you can stay on top of your finances and instead focus your time on your business. Whether you’re a sole trader or a large company, Xero offers the tools and insights you need to manage your supplier invoices effectively. Embracing Xero allows you to really take control of your business finances.

For more guidance on Xero, see our Xero accounting page or reach out to our team to take your financial management to the next level, freeing up your time to do what you do best in your business.

 

Related Services:

Cloud Accounting 

Xero Accountants 

Cash Flow Forecasting 

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