Making payments to vendors and suppliers can be a huge time drain for businesses. At the moment, Xero doesn’t have the functionality to allow you to make a batch payment directly on the platform. Instead, you’ll need to export a batch file from Xero and upload that to your business banking portal to make a payment.
Follow this complete guide to learn how to export a batch file from Xero to your bank, and then reconcile the transactions in Xero.
For information on Xero Bacs payments, check out our guide here.
A batch file contains a group of payments to be made to one or more suppliers. It typically includes the supplier's name, bank account number, payment amount, and payment date along with any payment reference.
You can also use a tool such as Telleroo to automate the payment process, meaning you don’t need to export batch files from Xero and upload them to your business bank account. With Telleroo you can pay multiple invoices directly from within Xero in a few clicks.
Step 1: Go to the "Bills to pay" tab in Xero
The first step is to navigate to the "Bills to pay" tab in Xero. Here you’ll find a list of all of your unpaid invoices. You can find this by going to “Business” > “Bills to pay”.
Step 2: Select the invoices you want to pay from the “Awaiting payment” tab
When you’re in the "Awaiting payment" tab, you can choose the invoices you want to pay. You can select up to 200 invoices by checking the boxes on the left-hand side.
Step 3: Click “Batch payment”
Once you’ve selected the invoices for payment, click the "Batch payment" button and then confirm.
Step 4: Select your payment date and your bank account
You can choose from the list of bank accounts connected to your Xero account, you can also add any details or narrative at this step. Click “Make payment” to confirm.
Step 5: This should take you to the "Bank" tab
When you click "Make payment" you should be taken to the "Bank" tab. This is where you’ll see the option to export a batch file for your bank.
Step 6: Export the batch file
Once you’ve selected the bank account, click the "Export" button to create a batch file for your bank. You should see the option to export to CSV or BACS.
The process of uploading a batch file to your business banking portal varies depending on your bank. Generally, you can follow these steps:
Step 1: Log in to your business banking portal.
Step 2: Navigate to the payments section and select "Batch Payments" or "Bulk Payments".
Step 3: Choose the file format that matches the file format you exported from Xero.
Step 4: Upload the batch file.
Step 5: Review the payments, and if everything is correct, authorise.
Important: before exporting a batch file, you must ensure you have enough funds in the selected bank account to cover the total amount of the invoices.
Remember to check with your bank to make sure you’re using the correct file format and uploading the batch file correctly.
After you have uploaded a batch file to your bank and made the payment, go back into your Xero account and follow these steps:
Mark the Payments as Paid
Once the payments have been made, you need to mark them as paid in Xero. To do this, go to the "Accounting" tab and select "Bank Accounts." Find the bank account you made the payment from and click on "Reconcile." Match the payments with the transactions in your bank account, and mark them as paid.
The time it takes to export a batch file from Xero and upload it to your bank's portal depends on the number of payments and the size of the file. However, this should typically take you a few minutes to do.
If you don’t want to go through the process of exporting a batch file from Xero and uploading it to your banking portal, you can use other payment methods, such as:
Online banking: You can manually enter each payment into your bank's online banking system.
Direct debit: You can set up a direct debit agreement with your suppliers, and payments will be debited from your account on the agreed dates.
Telleroo: You can connect Telleroo to your Xero account to pay multiple invoices quickly and easily, with pay runs able to be scheduled at any date and time in the future. Any payments removed from a pay run in Telleroo are instantly moved back to 'awaiting payment' in Xero, ready to be paid next time. Paid invoices are updated in Xero immediately, so you can reconcile the entire batch in one click.