Recording Payment for Your Sales Invoices in Xero

To record cash payment against your sales invoice follow the steps below:

  1. Go to Accounts > Sales > Click “Awaiting Payment” tab
  2. Click on the invoice you’d like to record a payment against and fill the “Make a Payment” area out.
    • Make sure you complete the Amount Paid, Date Paid and then select where the money will be paid into. So if you receive cash in hand, you will have to at some stage deposit that in a bank account. Select that bank account in the “Paid To” field as you’ll have to reconcile your bank with the amount paid later on.
  3. When you’re done with all the details, click “Add Payment” and your invoice would be recorded as paid. At this point, you’ll be brought to a screen and in the top there are two links called “View Invoice” and “Send Receipt”. If you want to send your customer a receipt for their payment click on that link.

How about if I am a cash business - like a butcher or fishmonger at the market? How am I going to invoice/receive payments. It isn’t worth the time for me!?! Never fear, here’s an easy way to do this if you have a high turnover cash based business:

  • Go to Accounts > Contacts and create a new contact by clicking “New”. Name this new contact “Cash sale at [enter the name of the place]”.
  • At the end of each day, get a copy of your daily takings (this is how much money came into the til).
  • Create a Sales Invoice addressed to the “Cash sale at [enter the name of the place]”
  • As your money comes in e.g. bank, cash, etc.. record the payment against the invoice (if you’ve forgotten how to do it, follow steps 1 - 3 above).

Next: Credit Notes in Xero - What are they & what do you use them for?

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