The other side of getting paid is paying your own bills. You will be pleased to know that bill management is as easy in Xero as invoicing and payments. The platform’s bill management system is very similar to invoice management in terms of function. It even uses many of the same procedures, buttons, and labels for a more uniform experience.
Managing Your Bills
The starting point for bill management in Xero is the ‘Purchases’ dashboard under the ‘Accounts’ tab. Go to this dashboard to instantly see a summary of your accounts payables, including purchase orders and outstanding bills. You can scroll left or right on the graph to get a better understanding of total amounts due in coming days and weeks.
You can create a new bill by clicking on the ‘+New’ button at the top left corner. Clicking this button also allows you to create new purchase orders and repeating bills as well. When the new bill screen pops up, enter the appropriate data just as if you were creating a new invoice. You will enter the vendor, date, description, category, and amount.
Just like with invoices, you can use items to reduce the amount of data entry required. Create new items by clicking on the ‘+ New Item’ button. Utilising items also makes it easier to order new inventory when the time comes. Use items to create a purchase order that can then be used to create a bill once the product arrives.
You can attach documents to your bills just as you do during invoicing. Drag-and-drop your documents or click the file icon at the top of the page.
When you are done creating the bill you can:
- save as a draft for future editing;
- save and submit for approval by another staff member;
- save and create another bill; or
- go right to approval if you have the authority to do so.
Additional Features
Xero makes Bill management easy with some additional features you are sure to love. For example, both you and your vendors can e-mail bills directly into the Xero files inbox. From there, you can select the document and use it to create a new bill. The original document (like an invoice, for example) appears side-by-side with your bill. It will remain attached to the completed bill when you’re done. If your vendor uses Xero, you can save an invoice sent through Xero as a draft bill.
You can check on outstanding bills by going to the ‘Awaiting Payment’ tab in the ‘Purchases’ dashboard. Here you will see a running list of all your bills and the dates they are due. Use the ‘Planned Date’ column to enter dates on which you plan to pay selected bills. You can then sort using that column as a way to remind yourself when a bill should be paid.
You can select bills to be paid by ticking the check boxes on the far-left side. You can then initiate a batch payment process that will create an electronic record to be sent to your bank. Your bank will make the payments and send the resulting records back to Xero for reconciliation.
Finally, Xero includes a selection of reports to help you keep track of your accounts payables. You will always have a good idea of when your company is spending money and what it’s being spent on. It is just another of the many great reasons to use Xero as your accounting software.