Bills
Managing bills isn’t just about paying them, it’s about protecting your business. A clear process for receiving and approving draft bills helps you stay in control of your cash flow and reduces the risk of mistakes slipping through unnoticed. Once your bills are approved, the real value comes from managing when and how they’re paid. This step isn’t just about clicking “pay”, it’s about controlling your cash flow, avoiding missed due dates, and maintaining good supplier relationships.
-
Drafts act as a checkpoint. They give you the chance to catch incorrect amounts, missing GST, or wrong supplier details before anything is final.
-
Duplicate invoices are more common than you’d think. A process lets you check what’s already in the system before approving.
-
Approving with the right attachments and dates means your records are always ready for tax time, audits, or funding reviews.
-
Drafts give you a clear picture of upcoming payments before they become liabilities, so you can plan ahead.
-
Fixing mistakes after approval takes more effort than catching them early. A solid process keeps things clean and low-maintenance.
WHY DO WE DO THIS?
WHAT DO WE MEAN BY SCHEDULE PAYMENT?
-
Instead of paying one bill at a time, create a weekly or fortnightly batch. This saves time and keeps your outgoings organised.
-
Pay bills close to their due date (but not late). This keeps more cash in your account for longer without damaging supplier trust.
-
If you can’t pay by the due date, flag it early. Good communication often prevents late fees or service disruptions.
-
Use Xero’s “Awaiting Payment” list to line up your payments. Mark bills as paid only when they’ve been processed through your bank feed.
-
For larger or critical suppliers, set automated reminders to avoid missing them during busy weeks.
WHAT IS A BASIC PROCESS FOR RECEIVING & APPROVING DRAFT BILLS?
-
Use Hubdoc or Xero Files as your main intake for digital bills. Avoid multiple inboxes, everything flows into Xero drafts bills.
-
Make sure you check the supplier, invoice number, date, due date, and GST before you approve for payment.
Always make sure a source document is attached.
-
Allocate to the bill to the correct account/tracking category.
Confirm totals match the invoice.
-
Once you have checked the details are correct, approve the bill, this moves the bill to Awaiting Payment
If incorrect, leave as draft and add a note for whoever uploaded it.
-
Add approved bills to your payment batch or calendar.
IT ALL BEGINS WITH AN IDEA
✦
IT ALL BEGINS WITH AN IDEA ✦
REVIEW & APPROVE BILLS
Open your Draft Bills in Xero
Go to Business > Bills to pay > Draft.
Check supplier details
Is the supplier correct? Are there duplicate names? Check GST numbers if relevant.
Review invoice date & due date
Ensure it matches the supplier invoice and falls in the correct reporting period.
Check the total amount & tax
Confirm GST/VAT is correct and the total matches the original document.
Review chart of accounts coding
Is the expense coded to the correct account? Add tracking categories if used.
Attach supporting documents
Make sure the original invoice/receipt is attached for audit trail purposes.
Check for duplicates
Look through recent bills for similar numbers or amounts.
Approve the bill
Once satisfied, click Approve to post it to Bills to Pay.
Draft Bills
Fix anything: supplier, invoice #, dates, amounts, GST, account code, attachments.
Double-check totals before approval.
Approved Bills
Wrong amount/tax → use Bill Credit Note.
Wrong supplier → credit wrong, re-enter correct.
Missing attachments → add new file; previous stays.