Invoice Intake for Xero Users

Xero makes accounting beautiful. But invoices often arrive in ugly ways—scattered across emails, delivered on paper, forwarded by coworkers. Here’s how to create a streamlined intake process that gets invoices into Xero cleanly.

Xero’s Native Capabilities

Xero includes several features for handling vendor invoices:

Bills in Xero

Basic bill entry with: - Manual data entry - Document attachment - Repeating bills for recurring invoices - Bill approval (on higher plans)

Limitations: - No automatic capture or OCR - Manual data entry required - Limited approval workflows on lower plans

Xero Inbox

Xero provides an email address for each organization:

How it works: 1. Forward invoices to your Xero inbox email 2. Documents appear in “Files” in Xero 3. Create bills from the documents

Pros: - Built into Xero - No extra cost - Simple to use

Cons: - No automatic data extraction - Still requires manual bill creation - Basic functionality

Hubdoc (Xero-Owned)

Xero acquired Hubdoc for document capture:

Features: - Email inbox for invoices - Auto-fetch from vendor portals - OCR data extraction - Push to Xero as bills or spend money

Pricing: Included with Xero plans (some limits apply)

Pros: - Included with Xero - Good OCR - Integrates natively - Auto-fetch from suppliers

Cons: - Limited approval workflows - Not as powerful as paid alternatives - Document limits on some plans

Third-Party Options

For more sophisticated intake needs:

Dext (formerly Receipt Bank)

Purpose-built for accountants and bookkeepers.

Features: - Multi-channel document capture - Excellent OCR accuracy - Learning from corrections - Two-way Xero sync - Receipt and invoice handling

How it works with Xero: 1. Forward invoices to Dext 2. Dext extracts data 3. Review and code 4. Publish to Xero as bills

Pricing: From $24/month (document-based)

Best for: Businesses and accountants wanting best-in-class document capture.

Bill.com

Full AP automation with Xero integration.

Features: - Invoice capture and OCR - Approval workflows - Payment processing - Sync to Xero

Pricing: From $45/user/month

Best for: Businesses wanting end-to-end AP with built-in payments.

ApprovalMax

Approval workflows for Xero.

Features: - Multi-step approval workflows - Approval matrices (by amount, department, etc.) - Budget checking - Audit trail

How it works: - Create bills in Xero (or integrate with Dext) - ApprovalMax manages the approval process - Approved bills are marked in Xero

Pricing: From $39/month

Best for: Businesses needing sophisticated approval routing.

Melio

Free payments with Xero sync.

Features: - Basic invoice upload - Free ACH payments - Sync to Xero

Pricing: Free for ACH

Best for: Cost-conscious businesses focused on payments.

Building Your Xero Intake Workflow

Option 1: Xero + Hubdoc (Simple)

Best for: Small businesses, low volume

Setup: 1. Configure Hubdoc in your Xero account 2. Forward invoices to your Hubdoc email 3. Set up auto-fetch for key vendors 4. Review and push to Xero

Pros: No extra cost, native integration Cons: Limited approval workflows, manual steps

Option 2: Dext + Xero (Better Capture)

Best for: Higher volumes, accuracy-focused

Setup: 1. Connect Dext to Xero 2. Configure your Dext inbox 3. Set up extraction rules 4. Publish approved items to Xero

Pros: Excellent OCR, handles volume Cons: Additional cost, another system

Option 3: Dext + ApprovalMax + Xero (Full Control)

Best for: Businesses needing approval workflows

Setup: 1. Dext captures and extracts 2. Bills publish to Xero as drafts 3. ApprovalMax routes for approval 4. Approved bills update to “awaiting payment” 5. Pay from Xero or integrated payment tool

Pros: Full visibility and control Cons: Multiple tools, more setup

Option 4: Bill.com + Xero (End-to-End)

Best for: Businesses wanting one platform

Setup: 1. Connect Bill.com to Xero 2. Forward invoices to Bill.com 3. Approve in Bill.com 4. Pay from Bill.com 5. Sync transactions to Xero

Pros: One system for intake to payment Cons: Per-user pricing, some Xero overlap

Intake Best Practices for Xero

Use a Single Email Address

Create one address for all invoices: - invoices@yourcompany.com or - Your Hubdoc/Dext email

Forward all invoices there, regardless of how they arrive.

Standardize Before Xero

Get invoices into consistent shape before they reach Xero: - Verify data is extracted correctly - Add missing information (codes, references) - Check for duplicates

Use Draft Bills

Create bills as drafts first: - Allows review before finalizing - Keeps “awaiting payment” accurate - Supports approval workflows

Attach Documents

Xero can store files with bills—use this: - Attach the original invoice PDF - Enables remote audit - Supports future reference

Leverage Xero’s Rules

Xero can remember coding: - Set up bank rules for payments - Use default accounts for vendors - Reduce manual coding

Common Xero-Specific Issues

Duplicate Bills

Xero warns about duplicate bill numbers, but only if you use the same vendor contact. Different vendor spellings bypass the check.

Solution: Standardize vendor names before entry.

Multi-Currency Complications

International invoices add complexity: - Set correct currency on bill entry - Check exchange rates - Reconcile carefully

Approval Limitations

Xero’s native approval (on some plans) is basic: - One-level approval - Limited routing options

Solution: Add ApprovalMax for sophisticated approval needs.

Chart of Accounts Mapping

When using third-party tools: - Ensure your chart of accounts syncs correctly - Map categories in the intake tool - Test that coding flows through

Choosing Your Stack

Low Volume (Under 50/month)

Recommended: Hubdoc (included) + Xero native approval

Why: Free with Xero, handles basic needs

Medium Volume (50-200/month)

Recommended: Dext + Xero + ApprovalMax (if needed)

Why: Better capture accuracy, scalable

Higher Volume (200+/month)

Recommended: Bill.com + Xero OR Dext + ApprovalMax + Xero

Why: Need robust automation, strong workflows

International/Complex

Recommended: Evaluate carefully based on specific needs

Consider: Multi-currency support, approval complexity, payment methods

Key Takeaways

• Start with Hubdoc—it’s included with Xero
• Add Dext or Bill.com when Hubdoc isn’t enough
• ApprovalMax fills Xero’s approval gaps
• Create one entry point for all invoices
• Attach original documents to every bill
• Standardize vendor names to prevent duplicates

Want a professional vendor portal that feeds into your Xero workflow? See how BillerPlus creates controlled invoice intake →