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Managing accounts payable on Xero

Xero is cloud-based, SaaS accounting software program for small enterprise clients positioned in lots of nations. The Xero firm, based in 2006, is New Zealand-based. Xero’s software program handles accounts payable as a conventional system requiring guide knowledge entry. For Xero accounts payable automation, Xero clients combine third-party AP automation software program. 

Methods to handle AP on Xero

Handle accounts payable (AP) on Xero by performing these crucial processes:

  • Obtain a vendor bill or one other invoice by electronic mail to the Xero accounting system or by scanning  
  • Approve the bill
  • Schedule fee
  • Xero provides bill/invoice to accounts payable
  • Fee made
  • Bill/invoice marked as paid

However discover that these steps performable inside Xero don’t cowl plenty of guide duties. For instance, accounts payable division workers have to visually decide that invoices are appropriate by way of guide verification processes and acquire approvals. 

These accuracy verification processes embrace 3-way matching (or 2-way matching) of the bill with the acquisition order (PO) and a receiving report, if relevant, for the receipt of products. 

AP workers wants to find out which designated budgetary supervisor(s) must approve the bill, in accordance with firm expense coverage. Then accounts payable routes the matched (usually paper-based) paperwork to the precise approver and follows up with approvers when their approval isn’t well timed. 

Accounts payable pays the invoices in a batch. Maybe accounts payable nonetheless makes use of old-school paper checks. When utilizing paper checks,  these guide steps are required: 

  • Having the CFO or Controller approve the verify run 
  • Getting licensed verify signatures 
  • Printing checks on paper 
  • Separating and submitting a verify copy with the matched bill doc copies
  • Stuffing and mailing envelopes with the checks and connected remittance advices
  • Responding to incoming provider calls or emails requesting present fee standing

Xero accounts payable workflows

The next descriptions relate to Xero accounts payable workflows for performing accounts payable processes within the Xero core accounts payable software program. 

Seize and enter provider payments/invoices

Customers of Xero’s Enterprise version plans, which embrace Early, Rising, and Established SaaS pricing plans, obtain the built-in Hubdoc function that captures payments and receipts in Xero. Hubdoc is a Xero accomplice for OCR knowledge seize that extracts knowledge from paperwork and creates transactions in Xero. The Xero payments electronic mail handle reveals on any standing tab within the Purchases overview web page. 

To seize provider payments and invoices in Xero utilizing the Hubdoc function, the invoice have to be an electronic mail attachment relatively than embedded within the electronic mail itself. For this electronic mail seize course of, you’ll ahead payments acquired from any provider to your Xero payments electronic mail handle. 

Most doc and picture codecs work when e-mailing payments to your Xero group’s distinctive electronic mail handle to create a draft invoice with an connected emailed invoice. You may electronic mail as much as 10 payments in a single electronic mail which can create separate payments in Xero. The utmost electronic mail dimension is 25MB. 

The emailed invoice can be in your organization’s base forex relatively than a international forex. Solely with a subscription that features multicurrency, you possibly can manually change the forex on the draft invoice or bill to the international forex in Xero.  

Provided that Xero can learn the emailed invoice efficiently, some fields, together with these, will auto-populate and be designated in Xero by a lightning bolt icon:

  • Contact
  • Date
  • Complete
  • Due Date
  • Reference

Discover that this bill seize course of might not be full or correct and nonetheless requires performing guide steps (listed within the Xero hyperlink for e-mailing payments) within the Enterprise/Payments to Pay menu and for required forex conversion. 

If you happen to don’t use Xero’s Hubdoc function for emailed invoice knowledge seize, it’s worthwhile to carry out guide knowledge entry to add invoices and payments into the Xero accounting software program system. Within the Enterprise/Payments to Pay menu, choose New Invoice and enter particulars for the fields. Save the invoice and ship it for approval earlier than paying the invoice. 

You’ll manually code these accounts payable payments to the proper expense or asset account, resembling stock. 

Pay payments and file funds

To pay payments, schedule payments within the system (by batch) by getting into the fee date and making use of a checkmark to invoices being paid. When the invoice is paid, Xero information the transaction as a discount in accounts payable as a debit and a balancing double-entry bookkeeping credit score to money (and any early fee low cost taken).

Including new suppliers

In Xero accounting software program, Xero units up new suppliers as Contacts and determines how you employ these Contacts—both as Suppliers or Clients, or each. If you happen to load a invoice, the Contact is used as a provider. Subsequently, you don’t want to maneuver Contacts to Suppliers. Once you use Hubdoc in Xero, Hubdoc will routinely arrange the provider within the Xero accounting software program system for you when the bill is acquired. In any other case, guide knowledge entry is required to arrange suppliers in Xero. 

Handle bills and reimbursements

With Xero, you possibly can see and handle invoices, bills, and reimbursements from the cloud-based on-line software program or with a cell gadget that makes use of the Xero app. Your visibility into spend administration is not going to be as complete as it will be with AP automation software program integration. 

Automating Xero AP workflow with Nanonets

You may absolutely automate all Xero AP workflow for bill receipt and bill processing, together with funds, with Nanonets Stream, its AP automation and bill processing software program for accounts payable. Nanonets makes use of accounts payable finest practices in its AP automation software program. 

Nanonets helps you obtain vendor onboarding simply and have glorious doc administration associated to accounts payable. Suppliers select a fee technique.  

Nanonets Stream AP automation software program permits you to ahead emails or scan invoices into Nanonets with AI/ML-enhanced clever OCR (optical character recognition) to seize bill knowledge electronically by line merchandise with headers. However Nanonets is an OCR professional and has a a lot increased accuracy price of capturing bill knowledge than Xero with HubDocs can reliably present for each bill. Nanonets AI-data entry is the important thing to unlocking accuracy and effectivity. 

Nanonets offers your enterprise well timed, touchless bill processing, with out human intervention or guide processes that’s powered by synthetic intelligence (AI) and its subset, machine studying (ML). Automated software program Bill processing consists of steps for verifying invoices, bill matching, approving invoices for fee, and paying accredited payments and invoices in batches. 

You’ll be capable to declare vendor’s early fee reductions if you pay inside the quick variety of days indicated in your bill fee phrases, like paying inside 10 days for two/10, web 30 to obtain a ten% low cost from the bill stability due as a substitute of paying the complete bill quantity in 30 days. Once you take early fee reductions on commerce payables for stock gadgets, the associated fee financial savings are spectacular. 

With Nanonets, after you seize the bill knowledge, Nanonets verifies the invoices and account coding and syncs that knowledge along with your accounting system. Nanonets matches invoices with supporting paperwork, together with buy orders (POs) and items receipts when relevant. 

What you are promoting can arrange bill approvers and spend limits compliant along with your firm coverage or let AI deal with bill approval workflows routinely for you inside Nanonets in case you choose. Approvers have the selection to Reject or Approve invoices for fee. 

Schedule and make world digital funds in a alternative of currencies utilizing environment friendly, massive batches with Nanonets. Then Nanonets will reconcile and match inner information or transactions or funds with financial institution accounts, bank card statements, or different sources for account reconciliation

Nanonets offers your enterprise crew clever views with visibility into enterprise spend, providing you with extra management to handle enterprise prices. 


The Xero accounts payable workflows are very time-consuming. When your enterprise begins streamlining workflows with Xero + AP Automation, the accounts payable workers is not going to have to carry out these repetitive guide knowledge entry steps for each provider, bill, or worker expense report requiring reimbursement.

Learn how Stream by Nanonets can supercharge Xero accounts payable automation workflows and supply extra accuracy and monetary controls. 



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