Welcome to the Fit Small Business Xero training course! In this lesson, we’re going to cover how to pay bills with a check in Xero.
You can follow along on your own Xero account. If you don’t have one already, click here to sign up for a free 30-day trial and follow along below.
To complete this lesson, you can either watch the video below, read through the step-by-step instructions, or do both. Let’s begin!
Why Is It Important to Pay Bills with a Check?
In order to ensure your accounts payable balance is always up-to-date, it’s important to not only enter all of your bills into Xero, but also to record the payment once it is sent.
In the previous lesson, we showed you how to mark bills paid online using a debit card or cash. In this lesson, we will show you how to pay bills by printing a check directly from Xero. You can pay your bills by printing the check directly from Xero, or writing a check manually and recording the payment in Xero. The advantage of printing a check from Xero is the transaction is automatically recorded and the bill is marked as paid for you.
How Do I Pay Bills with a check?
Follow the steps below to pay bills by printing a check.
Step 1 – Navigate to the Bills Dashboard.
From the Xero dashboard, click on Accounts and select Purchases as indicated in the screenshot below.
Step 2 – The Bills Dashboard should display.
Bills are grouped into 4 categories here: draft, awaiting approval, awaiting payment and overdue, as indicated in the screenshot below.
Bills that fall into the Awaiting Payment or Overdue category are ready for payment. To learn more about the different bill categories, check out our lesson on how to create a bill.
Step 3 – Select the bill(s) that you would like to pay.
A list of the bills that can be authorized for payment will display. Select one or more bills that you would like to pay by putting a checkmark in the first column as indicated in the screenshot below.
Step 4 – Proceed to pay the bill(s).
Once you have made your bill selections, click the “Make Payment” button as indicated below.
Step 5 – Select a payment method.
In the next screen, you can choose to make your payment by check, create a batch file to upload to your bank, or use a bill payment company called Bill.com. As mentioned previously, we will make a payment by check for the purposes of this lesson. Below is a brief description of each method.
- Pay By Check – Create and print checks directly from Xero.
- Batch Payment – Use batch payments to bundle multiple bills into one transaction. You can export the file and upload it to your online banking service for payment. Your bank will pay the bills included in the file. Note: You should check with your bank/financial institution to see if they accept batch payment files. Keep in mind that Xero does not charge for this service but you may incur additional fees from your bank/financial institution. You can find more info on how to get started with making batch payments here.
- Pay with Bill.com – Bill.com is a full service payment solution for both A/R and A/P. It integrates seamlessly with Xero and automatically syncs with Xero to keep your accounts payable balance up-to-date. You can learn more about Bill.com here.
Step 6 – Complete Check Details.
Complete the details of the check on the next screen as indicated below.
- Bank Account – Select the bank account that you would like to make the payment from the dropdown. If the bank account has not been set up, you will need to do that first and then return to this screen to complete the check details. In how to set up bank feeds, we walk you through how to set up your bank accounts.
- Check Numbering – Click this button to enter the starting check number that you would like to use. Note: You will need to do this the very first time you print checks from Xero. You will also have to do this if you are writing the check from a manual checkbook. After you print the first checks, Xero will automatically increment the check numbers for all future payments.
- Check# – Xero will automatically assign the next available check numbers.
- Pay to – This info will automatically populate from the bill. If you need to change the payee, you can do so by typing directly in this field.
- Address – This info will automatically populate from the bill. If you need to change this info, you can do so by typing directly in this field.
- Date – This should be the date that you print the check (i.e. the check date).
- Memo – As indicated, this field is optional. However, it is a good idea to indicate an account number or any additional information that would help the supplier correctly apply the payment to your account.
- Amount – This field will automatically populate from the bill. If you want to pay a different amount then you can type the amount you would like to pay directly in this field.
- Check Style – You can customize the info that appears on your checks; including changing the font and adding your company logo. You can find the details on how to set up a check style here.
- Export Check CSV – If you export the check information to a CSV file, you can import it into VersaCheck to print. VersaCheck is a check creation program that integrates with Xero.
- Save & Print PDF – You can save the checks and print them from the PDF file. Note: You will need to align your printer and do a test print on blank paper before using your check stock. Make a copy of a real check on paper and use that to adjust the alignment before you print on a real check. You can find more info on how to align your printer here. Be sure to also use compatible check stock.
- Save – Use this option if you want to print the check from Xero later on or if you want to manually write the check from your checkbook.
- Cancel – Click this button if you do not want to proceed with paying the bill.
That wraps up the section on how to pay bills with a check. The next lesson in our Xero Training Course will be how to create an accounts payable aging report. In this lesson, we will walk you through how to use the A/P aging report to stay on top of your outstanding supplier bills. To access this lesson or any of the others in the series, click here. For a free 30-day trial of Xero, click the link below.