How to Accept Online Payments from Customers


Welcome to the Fit Small Business Xero
training course. In this lesson, we’re going to cover how to accept online
payments from customers in Xero. To follow along with me,
login to your Xero account now or click the link below this video for a free
30-day trial of Xero. You could also click this link to access our full Xero
course and other helpful resources. Let’s get started. As we discussed in the accounts
receivable aging report lesson, it’s very important to stay on top of the money
that your customers owe you, known as accounts receivable balance. By giving
your customers the option to make payments online you will get paid much
faster. This saves you time you would normally have to spend chasing after
customer payments, and it helps mitigate cash flow issues resulting from payment
delays. In this lesson we’ll show you how to connect a payment service to Xero so
that your customers can make payments online directly from their invoices.
Please note if you have customers who live in another country you can even
accept payment in a foreign currency. Be sure to watch our how to set up multi
currency video tutorial for step-by-step instructions. You can click here to
access this lesson. The first step to accepting online payments from your
customers is to connect a payment service to Xero. Using our fictitious
company Acme Web Pros Plus, we will show you how to connect a PayPal account to
Xero. From the settings menu you want to go ahead and select general settings. And
then we’re going to scroll down until we get to the connect section here. And
payment services is the last item here so click on payment services. And to add
a new payment service, you want to click this + add payment service button
here. And then from the drop down you will see a list of payment services that
you can connect to Xero. So we’ll go ahead and select PayPal. Please note that
depending on which payment service you have selected, the next few steps will
vary. If you have an existing payment account with one of the services that’s
listed be sure to have the user ID and password that you use to access that
account handy. So that you can just login instead of
creating a new account. In this next screen we’re going to enter the PayPal
account details. This first field actually is how you’d like the name of
the account to appear in Xero. So typically you’re going to set up an
account for your PayPal activity. So we’ll call that PayPal. And the next field
is your PayPal email address. If you have an existing PayPal account, enter the
email address that you use for that account. Otherwise, enter the email
address that you would like to use to set up a new PayPal account. Payment
account: in this field you want to select the account where the money will be
deposited. Typically that would either be your PayPal account or if you have it
set up to go to a bank account like a business checking then you want to
select that. So we’ll go ahead and select PayPal account here. Automate fees: you
want to go ahead and select this option if you would like for Xero
to automatically create the spend money transaction to go ahead and record the
fees for each PayPal transaction. And I do recommend that you do that, so we’ll
leave that check mark there. And then finally where do you want the paypal
fees to be recorded. So that should definitely be a separate account from
your PayPal account where your money will be showing up from your customer. So for here you typically should go ahead and set up a PayPal fees account on your
chart of accounts. Once you’ve made all your selections, go ahead and click the
save button. Please note that you may receive an email from PayPal which will
require you to confirm that you have set up a new PayPal account, and/or connected
a PayPal account to Xero. In order for you to accept payments you must respond
to that confirmation email. After you have successfully connected a payment
service to Xero, you are ready to send your customers invoices that they can
pay online. In the how to invoice a customer lesson, we showed you how to create and
send invoices to your customers via email. You can click here to access this lesson. Now that we have added a payment service
to Xero, the pay now button will appear on each customer’s invoice that you send
via email. Let’s go ahead and take a look at the steps that your customer will
follow to make a payment online. The customer will receive an email similar
to this one that will have a link to their invoice that they simply just need
to click on that link. And notice the pay now but that I mentioned here. So
they can click that button and they will be able to follow the steps to make
their payment online. Let’s go ahead and do that. So in this next screen your
customer, if they have a PayPal account, they can simply enter their user ID and
password into these fields and then click login to go ahead and make the
payment from their PayPal account. If your customer does not have an existing
PayPal account, or if they prefer not to pay with their PayPal account, they can
simply enter their debit or credit card information by clicking this button here.
If your customer does not have an existing PayPal account, but they would
like one, they can actually set up an account by entering their email address
and password in these fields as well here. Once your customer has successfully
made their payment, they will receive a notification. Behind the scenes, Xero will
mark the invoice as paid in your system and reduce your accounts receivable
balance by the amount paid. Your customer also has the option to save the invoice.
They can save it as a PDF file, as a CSV file, or they can save it directly to Xero
if they are also a Xero user. That wraps up the lesson on how to accept online
payments from customers in Xero. To access our full Xero course or any of
the other lessons in this series, click this link. You can also find a link below
this video for a free 30-day trial of Xero. If you have feedback about this course or if you have any questions,
please leave a comment below. Also don’t forget to subscribe.

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