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Best practices for invoicing in Xero

Support
Updated

Introduction

Now that you've integrated Anrok & Xero and configured your Xero account , you are ready to start adding tax to your invoices. When creating and editing invoices, there are a few things you'll need to make sure are selected to ensure that your invoices can be ingested by Anrok . To set you up for success, we've provided the following workflow for you to use.

 

Before you begin, click here to take a look at what Anrok looks for when calculating tax on a Xero invoice 

Checklist

Below is a checklist of what Anrok looks for when you send an invoice. In order to ensure tax is calculated and applied as expected, make sure the following information is included on all of your invoices.

  1. Customer's address — Providing the customer's complete address is essential for Anrok to determine what jurisdiction your customer is located in. Since taxability in a jurisdiction can differ by zip code, city, state, and country, we suggest being as detailed as possible when inputting your customer's address information.
  2. Issue date and due date — Selecting an issue and due date allows Anrok to determine whether the invoice is dated before or after your tax collection date within a given jurisdiction. It allows Anrok to determine which return to include the transaction within for filing.
  3. Amounts set as tax exclusive — Since tax rates can fluctuate, Anrok can only add tax on items that have a set base price. It's required your invoice amounts to be marked as tax-exclusive.
  4. Items — A key component of the Anrok tax calculation process in Xero is the inclusion of items on your invoices. These items need to be configured into Anrok as product IDs with an assigned product type and tax category. This configuration process ensures that when this item is included on an invoice, Anrok can look at the item's corresponding product ID to determine the item's taxability and tax rate in a given jurisdiction.
  5. Items marked as taxable — For Anrok to read an invoice, all items on the invoice must be marked as taxable. In cases where an item is not taxable, you can update the item's corresponding Anrok product ID to a non-taxable product type or tax category. If the customer is tax exempt, you can add the customer tax exemption certificate to the customer's profile in Anrok — which will prevent the tax calculation from being included on their invoices.

 

 

Workflow for creating and editing invoices

Try creating a new invoice in the demo above ☝️

  1. In the Xero app CleanShot 2023-07-19 at 15.00.52@2x.png, go to a new or existing invoice.
  2. Click Switch to the new invoicing (if you have not done so already). 
  3. Under To, add a new or existing customer, and include the following address information:
    • Zip code
    • City
    • State
    • Country code 
  4. Select an Issue date and Due date.
  5. Under Amounts are, select Tax exclusive (if not already selected).  
  6. Under Item, click the empty box, then select an item to include on the invoice.
  7. Under Tax rate, select Tax on Sales (if not already selected).
  8. When you are finished, click Save & close.
  9. Reload the invoice to view Anrok’s updated tax amount.

 

 

Now that your Anrok & Xero integration is complete, feel free to explore our Xero FAQ  article or reach out to us directly at support@anrok.com if you need any extra support or guidance.

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