Setting customer credit limits in Xero
Written by Carol Rigby, Partner at Cardens Accountants
We are really excited about the latest release from Xero as it will help our clients with managing their cashflow in these difficult times. You can now set credit limits for your customer in Xero and you can block invoices being sent out to customers where the new invoice will take them above the credit limit.
The blocking of new invoices will only work in the new sales invoice system so this is a good reason to swap over from the old classic invoicing if you are still using it. If the new sales invoice is blocked it will save it to draft until the client makes a payment and you can then approve the invoice. This also won’t work for repeating invoices if you are using this function as the invoices are sent automatically.
Customer credit features
The credit limit is set in the contact record and you also need to select the option “Block sending invoices past credit limit”. Alternatively, if you set a credit limit without putting in place the block, you can view the credit limit when you raise the sales invoice and it will show how much of the credit limit is available to use.
Another useful feature is that from the list of invoices you will be able to see if clients will exceed their credit limits when the invoice is approved via a blue/red credit note symbol.
When you track a customers’ credit details in their contact record, or when you create an invoice, you’ll have an overview of:
- total overdue payments
- outstanding balance
- credit limit
- available credit
If you think your business could benefit from using the credit limits the following links will take you to all the detailed guidance from Xero:
Set a credit limit for a customer
View a customer’s credit details
Count on Cardens
Xero is pioneering online accountancy software that is powerful, flexible and great value for money. As a Xero Platinum Partner, you will be in safe hands knowing that we have the experience and knowledge to help you get the most from Xero.
If you would like to know more, please read our brochure, contact James Phillips at or call 01273 739592.
