One you have your new invoice open, you will want to fill it in with as much detail as possible. Here is how to do that. Please note here that the advice below is from the desktop version and mobile versions may differ slightly in layout… watch the video above for a full tutorial.

• Contact details - In the ‘To’ field, start typing your contacts details. If the client is an existing client the system will pre-determine options you can select from. Click on the contact name you wish to use. Xero will then automatically draw through the rest of the full contact details you have on record to this new invoice and link the invoice to the client for you, so that the invoice shows up under client records.
• Invoice date - The system preselects the days date for ‘invoice date’, but you can press the drop down arrow and change this if you wish. 
• Due date - You can then follow the same instructions for your ‘due date’. The clever thing that the Xero invoice system allows you to do here, is to also use a ‘+number’ functionality, creating a date based on predetermined intervals. So, let us say you decided there will be times where your invoices need to be paid in 7, 15, or 30 days, then you can type ‘+7’, ‘+15’, or ‘+30’ and Xero will work out the relevant due date for you.
• Invoice number - Invoice numbers will automatically count upwards sequentially, which can be modified if your invoice requires a more specific numbering system. Your next invoice will raise with a number moving up by one from the original internal preset system.
• Invoice reference - You can then add a reference. Best practice is to make sure iot is something that is easily identifiable to your client. In most cases this could be a purchase order number, or a client job number for example.
• Branding - this refers to any preset invoice templates you may have set up. Most companies may have one style, but if you are an umbrella company with subsidiary revenue streams you may wish to design templates relevant to individual sectors of your business.
• Adding a file - You can also add files to your invoice if this is relevant, using the button next to ‘preview’. These could be files in yoru Xero system, such as terms of business, or from your computer, such as project overviews.
• Tax - just above the item lines is a box next to the prompt ‘Amounts are’. This is where you need to decide if your invoice is inclusive, or exclusive of tax, or no tax at all..
• Item lines - Scroll down to the product/service details of your invoice and click ‘Add an item / description’. In this row of data you will be able to add further details, such as a description, a unit quantity and price. You can also select relevant tax rates here too. If you have pre-populated product or service offerings in your system, this can be as easy as selecting the line you wish to add. If you need to edit this entry later on hover your mouse over a line item and click the item menu to add a discount, edit an inventory item, or remove the line from the invoice. You can also drag and drop items to reorder the invoice details if you need to.
• Note on line discounts - make sure that if you are offering your client a discount that you are clear in your invoice if it is on a single item (then add the discount to your line), or to your total invoice (then add the discount to each line).
• Note on line ‘account’ - This refers to your revenue account, in other words which area of your business this sale is to be accounted for.
• Notes on line ‘region’ - This refers to Tracking Categories which can be set up in Xero and act like department references. Your business can use these to track specific income.
• Adding a message - this can be added easily under the description column, on a new row.

“A revenue Account is a pot of money where you can record your income. All bookkeeping systems use what they call a chart of accounts (COA) to break down what you want to record in terms of money coming in and money going out. Revenue Accounts are a set of accounts to record money coming in. These typically include accounts with names like SALES or INTEREST INCOME or OTHER REVENUE.

It is also perfectly feasible for users to set up their own revenue accounts to suit the needs of their business.

As for Tracking Categories, these are optional fields which can be set up to add additional reporting capability. They work a bit like department references and sit alongside the COA as a method of breaking down sales and purchases. Xero allows you to set up to 2 tracking categories and these can be based on anything you like. So it could be a list of sales personal or a list of Regions/territories etc, it's entirely up to the individual business what they feel they need to track.”

David Oliver, Senior Consultant at Valued.

Adding the invoice to a project? Sometimes there will be projects that we run with clients where there may be multiple invoices to raise and pay along the project’s life. You can link these together on your open Xero invoice, by selecting the ‘assign item to project’ link next to the ‘add new line’ button.

When you have finished creating your invoice, you can choose to save as a draft, or approve it. Remember you can go back to the invoice at any time before a partial, or complete payment is made to either: edit, send, get a link, or print the PDF.

• ‘Send’ –  which emails a copy of the invoice to your client
• ‘Get link’  – To copy a link of the online invoice which you can paste in a personal email to your client
• ‘Print PDF’ – To create a PDF copy of the invoice which you can attach by email to a client. Make sure to mark this as sent for your records.

The invoice's status will automatically update on the system to draft (which means it has not been sent), awaiting payment (meaning it has been sent), or paid (meaning it has been reconciled), depending on the process stage.