Reconcile
When someone pays just part of an invoice (or bill), don’t panic, it happens all the time. Maybe a client is on a payment plan, maybe they’re short this week, or maybe you’re the one easing up on cash flow. Either way, Xero makes it easy to apply part-payments and keep the rest tracked.
What it looks like in your bank feed: You’ll see a payment amount that doesn’t match the full value of the invoice or bill. For example, your customer paid you $500, but the invoice total is $1,200.
HOW DO YOU USE THIS?
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Some customers prefer to spread their payments over time—especially for larger invoices. You might agree to a 50/50 split, or break it down over a few weeks. This keeps cash flow flowing for both sides without pressure.
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Let's be real—sometimes people just don’t have the full amount right away. A customer might pay what they can now and promise the rest later. As long as there’s communication, it’s workable—and Xero helps you track what's still owed
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Often you’ll take a deposit before starting work, especially for projects or custom orders. That first payment is a part-payment toward the full invoice. You can reconcile that now and apply the balance later.
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Reconciling isn’t just about tidiness—it’s protection.
If someone’s charged you twice, or a payment’s bounced without you realising, reconciling helps you spot those problems fast. No more finding out three months later when it’s too late to fix. -
This one’s sneaky: a customer pays $2,000 intending to cover parts of two different invoices. Xero might not catch it automatically, but you can apply partial payments to each one using Find & Match.
WHEN WILL YOU USE IT?
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You’ve issued a $1,000 invoice, and they pay $300 to lock in the work. You can record and reconcile that $300 now, so your books stay tidy, and Xero will track the $700 still owing.
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For projects that roll out over weeks or months, it’s common to get paid in stages. Each payment gets matched to the same invoice or project, keeping things clear and traceable.
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If your customer is running behind but still sending money in chunks—say $200 here, $150 there—you’ll use part-payments to match what’s received and track what’s still outstanding.
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It works both ways—you might be the one sending partial payments to a supplier. You’ll apply part-payments to bills in Xero the same way to keep your accounts payable accurate
IT ALL BEGINS WITH AN IDEA
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IT ALL BEGINS WITH AN IDEA ✦
In the Reconcile tab, find the transaction line.
If Xero doesn’t suggest a match, click Find & Match.
Search for the invoice or bill the payment relates to.
Tick it—even if the amounts don’t match.
If the payment does not match then select split
At the bottom, Xero will show you a Part Payment note.
Double-check everything, then click Reconcile.
Xero will mark that invoice or bill as part-paid and keep the balance sitting in your “Awaiting Payment” section.
HOW TO RECONCILE A PART PAYMENT
WHAT HAPPENS NEXT TIME?
When the next payment comes through, just repeat the process.
Xero will keep stacking payments against the same invoice or bill until it’s fully paid.
You’ll always know what’s still owed—and your reports will reflect what’s actually going on.
Common use cases:
Customer is paying in instalments
You’ve agreed to a split-payment plan
You’re chasing the final amount later (ugh, we’ve all been there)
You’re paying a supplier deposit now, and the rest after delivery
Customer is paying in instalments
You’ve agreed to a split-payment plan
You’re chasing the final amount later (ugh, we’ve all been there)
You’re paying a supplier deposit now, and the rest after delivery
COMMON USE CASES
Watch out for:
Accidentally creating a new invoice for the second payment (just keep matching to the original)
Forgetting to follow up on the outstanding balance—Xero tracks it, but it’s still up to you to chase it.
