Apply prepayment to new invoice or bill

If your customer or supplier has outstanding credit from a prepayment, Xero prompts you to allocate the credit next time you approve a sales invoice or bill for that contact.

  1. Approve the new invoice or bill.
  2. Xero prompts you to allocate the outstanding credit. Click Allocate.

    Allocate Outstanding Credit pop up. Option to allocate or skip.

  3. Enter the amount to apply as credit on the invoice or bill.

    You can allocate less than the full amount of the prepayment, for example if the prepayment is more than the amount of the invoice or bill.

    Image showing credit allocated.

  4. Click Allocate Credit.