Best practices for invoicing in Xero

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Introduction

Now that you've integrated Anrok and 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.

Invoice checklist

Below is a checklist of what Anrok looks for when calculating tax on an invoice. To make sure tax is calculated and applied as expected, include the following information on all your invoices:

    • 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.

      Tip CleanShot_2024-04-30_at_15.47.03_2x-removebg-preview.png

      The hierarchy for billing address information is Shipping address > Billing address > Payment method metadata. When a shipping address is provided, it will be prioritized by Anrok as the customer's applicable address.



  • 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.
  • Amounts set as tax exclusive — Since tax rates can fluctuate, Anrok can only add tax on items that have a set base price. It requires your invoice amounts to be marked as tax-exclusive.
  • 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.
  • 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.

 

 

Create and edit an invoice

Here is our recommended workflow for manually creating and editing invoices in Xero. These tips can help ensure tax is reflected correctly within Anrok and in your billing system.

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.

 

Note CleanShot_2024-04-30_at_16.01.40_2x-removebg-preview.png

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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