Record payment of a sales invoice or bill

You can record a full or part payment of a sales invoice or bill that's awaiting payment.

Get to a sales invoice that's awaiting payment from Sales or a bill that's awaiting payment from Purchases. You can also drill down from certain reports or customer statements. Your user role will determine whether you can record a payment of an invoice or a bill.
Role comparison tables

Related pages:

Pay invoice mainPay invoice main.


How to record a payment directly on the sales invoice or bill

Pay a sales invoice or bill

If your accounts have been locked your role and the type of lock will determine whether you can enter a payment date that is before the lock date.

You can record a full or part payment on an Awaiting Payment sales invoice or bill. A payment transaction will be created in the bank account for a payment you enter. If the invoice or bill is fully paid, its status will change to ‘Paid’ and it will move to the Paid tab.

If you are recording a payment for an invoice or bill that was automatically generated to repeat, the payment is applied to the individual transaction only and not to any others in the series.

The fields and process for paying an Awaiting Payment invoice or bill is the same.

To pay:

  • an invoice, go to Accounts > Sales then click on Awaiting Payment
  • a bill go to Accounts > Purchases, then click on Awaiting Payment.

Click on your invoice or bill to open it, then scroll to the Make a payment section at the bottom of it.

Invoices or bills marked as paid will no longer display on Money Coming In (aged debtor) or Money Going Out graphs on the main Dashboard.
Invoices or bills that you have marked to pay on a future date will display on the Money Going Out graph.

Amount paid

Enter the amount paid. The Amount Paid field defaults to the total amount due on the invoice or bill, taking into account any payments already made or credit notes attached to it. You can change this to another amount if a part payment was made.

Use Xero's inbuilt calculator to help you work out transaction amounts

Pay fields

Pay fields.

If you enter an amount greater than the amount due, you will be prompted to create an overpayment for the surplus amount.
Create an overpayment
Refund overpayments, prepayments and credit notes

Date Paid

The date on which you made or received the payment or part payment. If the Date Paid on an invoice or bill you are paying is in the future, it will display with the amount being paid on the Money Going Out graph (in green).

Paid From

Choose the account from which you made the payment or have received the payment into.

pay inv - choose bank acct.png

  • If you're recording a cash payment, choose the bank account the money will be paid from or received into. Amounts paid or received (whether full or partial) will display in the list of bank account transactions for the chosen account.

pay inv - shown in bank acct.png

  • If the payment (or part payment) is not cash and is to be recorded against another account, those that you've set to 'payments enabled' in your Chart of Accounts will display. Payments against these accounts don't go through your bank account and you'll only see these transactions via certain reports e.g. Balance Sheet, Account Transactions Report.

Nonbank acct


Payment reference if required.

Ref field

  • If you're paying a bill by cheque, this is a useful place to put the cheque number or payment reference number from your online banking payment confirmation. This will display during bank reconciliation so that you can match the payment with the processed cheque or bank payment on your downloaded bank statement line.
  • For sales invoices, overpayments, and prepayments, the reference you enter here will appear on the Reference column of any related customer statements.

AP Chq ref

  • If you receive a payment for one of your sales invoices, you could enter the invoice number of the invoice being paid. This will make the payment for this invoice easily recognisable during bank reconciliation when the incoming payment displays on your downloaded bank statement line.

AR Inv ref

  • If you bank a whole lot of cheques at once from customers and these come through as one large amount during bank reconciliation, you might like to enter the date you banked the cheques, or a bank deposit reference on each of the invoices covered by the cheques so that during bank reconciliation you can identify which invoices the deposit covers.

Ref for bulk deposit

  • During bank reconciliation you can identify the sales invoice payments covered by the single imported statement line by ticking all those with the reference number you used for this deposit.

Ref match

  • If you leave this field blank then nothing will show as the reference against this payment during bank reconciliation.

All fields with the exception of Reference are mandatory.

Pay by cheque

Tick Pay by cheque if you want to print the cheque from Xero, or to record you're paying the invoice by cheque.

Enter, change or view the details that'll print on the cheque

Show history

Add Note

Show History

View the changes that have been tracked for the invoice or bill in History & Notes.

history - pay inv.png

Add Note

Enter a note specific to this invoice or bill at any time in History & Notes.

Invoices or bills that have been fully paid will no longer appear on the awaiting payment tab.

Complete partial payments

You can make partial payments directly from bank reconciliation by creating a 'split' transaction on the invoice or bill.

Sales invoices or bills that have been partially paid i.e. have an amount outstanding will remain on the Awaiting Payment tab until the full amount has been recorded as paid. The amount paid, and amount due will display.

ar - aw pay partial.png 

The invoice or bill will reflect any partial payments made or credit notes attached. You can record partial payments as often as necessary until it is fully paid - but no more than the total amount due.

Partial payments

Any amounts paid or credited will also show on the PDF invoice if you wanted to send a copy of an invoice showing partial payments to your customer.

Add overpayments

You can also record overpayments directly from bank reconciliation by adding the Spend Money or Receive Money overpayment in Find & Match.
Record an overpayment during bank reconciliation

Sales invoices or bills that have been overpaid will go straight to the Paid tab. The overpayment transaction will go to the Awaiting Payment tab. It will stay there till you refund the overpayment or use it as credit on another invoice or bill.

The paid invoice or bill will show the amount paid, less the overpayment amount. The overpayment is a separate transaction and not an amount owed on the invoice or bill. However, invoice (Spend Money) overpayments will show on customer statements.

View customer statements

Delete payment

You cannot edit any part of a sales invoice or bill that has been paid, except for the account it has been assigned to, the tracking and file attachments.

If you have entered a payment in error you can delete the payment from the list of transactions in the relevant bank account.

You cannot delete an invoice or bill that has been paid. However, you can delete the payment, which will return it to the awaiting payment tab. You can then void it. For best accounting practice you should credit an invoice or bill rather than voiding it. You should only void an invoice or bill you have not sent. For how to credit invoices or bills you should speak to your accountant or bookkeeper. For more information on credit notes in Xero please see our Credit Notes help.