Using Xero with Recruitly

Recruitly's Xero integration brings your financial workflow directly into your recruitment platform, eliminating the need to switch between systems when managing invoices and payments. This native integration creates a seamless connection between your recruitment operations and your accounting system, ensuring that invoice data flows automatically between Recruitly and Xero while keeping client information synchronized across both platforms.

The integration is designed to support your entire invoicing workflow — from initial setup and configuration through to invoice creation, data synchronization, and financial reconciliation. Whether you're billing clients for successful placements or managing retainer agreements through company records, the Xero integration keeps your financial data accurate, consistent, and always up to date.

How the Integration Works

At its core, the Xero integration establishes a direct API connection between Recruitly and your Xero account. This connection enables Recruitly to create invoices in Xero, sync client information bidirectionally, and maintain real-time synchronization of invoice updates. When you create an invoice in Recruitly, the integration automatically pushes that invoice to Xero along with all relevant client data, line items, tax calculations, and payment terms. If the client company already exists in Xero, Recruitly matches the invoice to that existing contact; if not, it creates a new contact record automatically using the company information stored in Recruitly.

The integration maintains this connection continuously once established, meaning that any changes you make to invoices in Recruitly are reflected in Xero automatically. This bidirectional synchronization ensures that your financial records remain consistent regardless of where you're working, reducing the risk of data discrepancies and eliminating the need for manual data entry between systems.

Setting Up the Connection

Before you can begin using Xero within Recruitly, you need to establish the connection between your Recruitly account and your Xero organization. This setup process requires admin-level access in Recruitly and an active Xero account with appropriate permissions.

The connection process begins in Recruitly's Marketplace, which serves as the central hub for all third-party integrations. Access the Marketplace by clicking on your user icon in the interface, then navigate to the integrations directory. Locate Xero among the available integrations and initiate the connection process. Recruitly will redirect you to Xero's authentication system, where you'll sign in to your Xero account using your standard credentials.

Once authenticated, Xero will present an authorization screen detailing the specific permissions that Recruitly is requesting. These permissions typically include the ability to create and update invoices, read and write contact information, and access your chart of accounts and tax rate configurations. Review these permissions carefully — they define what actions Recruitly can perform within your Xero account. When you approve the authorization, Xero generates an access token that allows Recruitly to communicate with your Xero organization securely.

After authorization is complete, you'll be redirected back to Recruitly, where you should see a confirmation message indicating that the connection has been established successfully. At this point, the integration is active, and Recruitly can begin communicating with Xero. However, before creating your first invoice, you'll want to configure your invoice settings to ensure that invoices are created with the correct defaults for your organization.

Configuring Invoice Settings and Defaults

Once the connection is established, proper configuration of your invoice settings is essential to ensure smooth operation and consistent invoice behavior. These settings control how invoices created in Recruitly behave when they're pushed to Xero, what default values they carry, and how they appear in both systems.

Access the Xero configuration interface by returning to the Marketplace and clicking on the Xero integration. This opens a settings panel with two primary sections: invoice display settings and invoice defaults.

Invoice Display Settings

The invoice display settings control which invoices you see when viewing Xero-related data within Recruitly. The primary setting here is the "Only show invoices raised from Recruitly" toggle. When this setting is enabled, Recruitly filters your invoice views to display only those invoices that originated within Recruitly and were subsequently synced to Xero. This filtering is particularly valuable if your organization uses Xero for multiple purposes beyond recruitment billing — for example, if you also process supplier invoices, expense claims, or other financial transactions directly in Xero.

By enabling this filter, you ensure that Recruitly's interface remains focused exclusively on recruitment-related billing, keeping your invoice lists clean and relevant to your recruitment operations. If you disable this filter, Recruitly will display all invoices from your Xero account, including those created directly in Xero outside of the Recruitly platform.

Invoice Defaults Configuration

The invoice defaults section is where you establish the standard settings that will apply to all invoices created in Recruitly. While these defaults can be overridden on a per-invoice basis during creation, setting appropriate defaults here streamlines your invoicing workflow and ensures consistency across your billing operations.

Account Code Assignment — Every invoice needs to be assigned to an account in your Xero chart of accounts. This account code determines where the invoice revenue is categorized in your financial reports. Typically, recruitment organizations assign invoices to a "Sales" or "Revenue from Services" account, but your specific account structure may vary depending on how your financial team has configured Xero. Select the account code that best matches your recruitment revenue stream. When you create an invoice in Recruitly, this account code will be applied automatically to all line items unless you specify otherwise.

Tax and VAT Configuration — Tax handling is a critical component of invoice configuration, as incorrect tax settings can lead to compliance issues and financial discrepancies. The integration provides two related tax settings: the tax rate and the tax type.

The tax rate setting determines which VAT or sales tax rate is applied to invoice line items by default. This rate must correspond to a valid tax rate that exists in your Xero configuration. For organizations operating in a single jurisdiction with a standard tax rate, this setting is straightforward — simply select your standard rate (for example, 20% VAT in the UK, or 10% GST in Australia). For organizations operating across multiple jurisdictions or dealing with varied tax treatments, you may need to adjust this setting per invoice to accommodate different tax rates for different clients or services.

The tax type setting controls whether tax amounts are included in or added to the line item prices you enter. This distinction is crucial for accurate invoice totals and tax reporting. When you select "Tax Inclusive," the prices you enter are treated as final amounts that already include tax. Xero then calculates the tax component by working backward from the total. For example, if you enter a $120 line item with 20% inclusive tax, Xero calculates that the base amount is $100 and the tax component is $20. When you select "Tax Exclusive," the prices you enter are treated as base amounts to which tax will be added. Using the same example, a $100 line item with 20% exclusive tax results in a total of $120 ($100 base plus $20 tax). Choose the tax type that matches your pricing structure and business practices.

Invoice Status Management — When an invoice is created in Recruitly and pushed to Xero, it can be assigned one of two initial statuses: Draft or Authorised. This status determines whether the invoice is ready for immediate action or requires additional review before being sent to clients.

Setting the default status to "Draft" means that invoices will be created in Xero in a preliminary state. They'll be saved and visible in your Xero account, but they won't be finalized or sent to clients. This setting is appropriate if your organization requires financial review or approval before invoices are dispatched — for example, if a finance manager needs to verify invoice details, apply manual adjustments, or coordinate payment terms with clients before authorizing the invoice for sending.

Setting the default status to "Authorised" means that invoices are created in a finalized, ready-to-send state. Xero treats authorized invoices as complete and approved, and they can be sent to clients immediately or queued for automatic sending if you have that configured in Xero. This setting is appropriate for streamlined invoicing workflows where invoices are created with accurate, finalized information and don't require additional review.

Client Email Configuration — The final default setting controls whether invoices are automatically emailed to clients when they're created. When this option is enabled, Xero will send the invoice to the client's email address immediately upon creation (or queue it for sending if the invoice is in Draft status and later authorized). When disabled, invoices are created in Xero but not sent — you'll need to manually trigger the sending process from Xero if you want to dispatch the invoice to the client.

This setting provides flexibility for different billing workflows. If your organization prefers to review invoices before they reach clients, or if you coordinate invoice sending with other client communications, you may want to disable automatic emailing. If your invoicing process is standardized and invoices are ready to send immediately upon creation, enabling automatic emailing can save time and ensure prompt delivery to clients.

After configuring all these defaults, save your settings. These configurations will now apply to all future invoices created in Recruitly, though remember that you can adjust any of these settings for individual invoices during the creation process if specific circumstances require different treatment.

Creating Invoices in Recruitly

With your Xero integration configured, you're ready to create invoices that will be automatically synchronized to your Xero account. Recruitly provides two distinct pathways for invoice creation, each designed to support different billing scenarios in your recruitment workflow.

Invoice Creation from Placement Records

The most common invoicing scenario in recruitment involves billing a client for a successful placement. In this workflow, the invoice is directly tied to a specific placement record, which contains all the relevant context: the candidate who was placed, the job they were placed into, the client company, the agreed fee structure, and the placement date. Creating invoices from placement records ensures that your billing is tightly connected to your recruitment operations, making it easy to track which placements have been invoiced, which invoices are outstanding, and how your placement activity translates to revenue.

To create an invoice from a placement record, navigate to the specific placement in Recruitly. Within the placement interface, you'll find an option to create a new invoice — typically represented as a "+ Invoice" button or similar control. When you activate this option, select "Xero Invoice" from the available invoice types. This opens the invoice creation form.

The invoice form presents all the fields necessary to construct a complete invoice. You'll need to specify the invoice number (which can follow your organization's numbering scheme), the invoice date, and the due date for payment. The line items section is where you detail what you're billing for — typically this includes the placement fee, which might be calculated as a percentage of the candidate's salary or as a fixed amount depending on your client agreement. You can add multiple line items if needed, for example, to separate the placement fee from additional charges or to itemize different components of the service.

Each line item requires a description, quantity, unit price, and tax treatment. The tax treatment can use the defaults you configured earlier, or you can adjust it for specific line items if needed. As you build the invoice, Recruitly calculates the totals automatically, applying the appropriate tax calculations based on your settings.

The form also provides fields for additional information such as reference numbers, purchase order numbers (if your client requires them), payment terms, and any notes or special instructions you want to include on the invoice. If you need to override any of the default settings for this particular invoice — such as using a different account code, tax rate, or email setting — you can adjust those values directly in the form.

Once you've completed all the necessary fields and reviewed the invoice for accuracy, create the invoice. At this moment, several things happen automatically. First, the invoice is saved in Recruitly and becomes visible in the Invoices section of the placement record. Second, Recruitly packages all the invoice data and pushes it to Xero through the integration. Third, Xero receives this data and creates a corresponding invoice in your Xero account, applying all the settings and values you specified. If the client company exists in Xero, the invoice is linked to that existing contact; if not, Xero creates a new contact record using the company information from Recruitly. Finally, if you enabled automatic client emailing, Xero sends the invoice to the client's email address.

Invoice Creation from Company Records

The second invoicing pathway involves creating invoices directly from company records. This approach is useful for billing scenarios that aren't tied to specific placements — for example, retainer fees, consulting services, administrative charges, or other ad-hoc billing arrangements with clients.

The process for creating invoices from company records mirrors the placement-based workflow in most respects. Navigate to the relevant company record in Recruitly and locate the Xero invoice creation option (typically a "Xero Invoice" button within the company interface). Activate this option to open the invoice creation form.

Fill in the same set of fields you would for a placement-based invoice: invoice number, dates, line items, descriptions, amounts, tax settings, and any additional information or notes. The key difference is that this invoice isn't connected to a specific placement record — it exists as a standalone billing transaction between your organization and the client company.

When you create the invoice, Recruitly follows the same synchronization process as with placement-based invoices: the invoice is saved in Recruitly (appearing in the Xero Invoices section under the company's Overview tab), pushed to Xero, and processed according to your default settings. The invoice appears in your Xero account immediately, ready for payment tracking and reconciliation.

Understanding Invoice Synchronization

After an invoice is created, the integration maintains ongoing synchronization between Recruitly and Xero. This bidirectional sync is one of the integration's most valuable features, as it ensures data consistency and reduces the risk of discrepancies between your recruitment system and your accounting system.

When you update an invoice in Recruitly — for example, adjusting line item amounts, changing the due date, adding or removing charges, or modifying the payment terms — those changes are automatically pushed to Xero. Xero updates the corresponding invoice record to reflect these changes, ensuring that your financial records remain accurate. This synchronization happens in near real-time, so changes appear in Xero almost immediately after you make them in Recruitly.

Similarly, when invoice statuses change in Xero — for example, when an invoice is marked as paid, partially paid, or voided — those status updates can be reflected back in Recruitly (depending on your specific integration configuration). This bidirectional flow means you can view current invoice status information directly within Recruitly without needing to switch to Xero to check on payment status.

The client information synchronization is equally important. When you create an invoice for a client company that doesn't yet exist in Xero, the integration automatically creates a new contact record in Xero using the company details stored in Recruitly. This includes the company name, address, email address, phone number, and any other contact information available in the Recruitly record. If the company already exists in Xero, the integration matches the invoice to the existing contact, ensuring that all invoices for that client are properly consolidated under a single contact record in your accounting system.

This automatic matching and creation process eliminates manual data entry and reduces the likelihood of duplicate contact records or mismatched client information. It also means that updates you make to company information in Recruitly — such as changing an email address or updating a billing address — can be reflected in Xero when new invoices are created, keeping your contact database consistent across both systems.

Managing and Viewing Invoices

Once invoices are created and synced to Xero, you can view and manage them within Recruitly. The visibility and organization of these invoices depends on where they were created and how you've configured your display settings.

Invoices created from placement records appear in the Invoices section of the respective placement record. This section provides a chronological list of all invoices associated with that placement, showing key information such as invoice numbers, dates, amounts, and current status. You can click on individual invoices to view their full details, including line item breakdowns, tax calculations, and payment information. If you need to make changes to an invoice, you can do so directly from this view — any edits you make will sync to Xero automatically.

Invoices created from company records appear in the Xero Invoices section within the company's record, typically under an Overview or Financial tab. This organization keeps all billing activity for a given client consolidated in one place, making it easy to review the complete financial relationship with that client. You can see all invoices raised for the company, track payment status, and identify any outstanding balances.

The invoice views in Recruitly display status information pulled from Xero, giving you visibility into where each invoice stands in the payment cycle. Common statuses include Draft (invoice created but not finalized), Authorised (invoice finalized and ready for payment), Sent (invoice dispatched to client), Partially Paid (client has made a partial payment), Paid (invoice fully settled), and Voided (invoice cancelled). These statuses update automatically as the invoice progresses through its lifecycle in Xero, providing you with current information without requiring you to log into Xero separately.

If you enabled the "Only show invoices raised from Recruitly" filter in your configuration settings, the invoice lists in Recruitly will display exclusively those invoices that originated within Recruitly. This filtering keeps your views focused and relevant, particularly if you use Xero for other financial activities beyond recruitment billing. If the filter is disabled, you'll see all invoices from your Xero account, including those created directly in Xero outside of Recruitly.

Working with Xero Directly

While the Recruitly integration handles most invoicing tasks, there are times when you'll need to work directly in Xero. This might include applying manual journal entries, processing payments, reconciling bank transactions, running financial reports, or performing end-of-period accounting activities.

Invoices created in Recruitly appear in your Xero account just like any other invoice. You can find them in Xero's Sales section under Invoices, where they're listed alongside all your other accounts receivable transactions. The invoices contain all the information you entered in Recruitly: client details, line items, amounts, tax calculations, reference numbers, and notes. Because they're standard Xero invoices, you can perform any Xero operation on them — apply payments, create credit notes, send reminders to clients, attach supporting documents, or include them in financial reports.

When you perform actions on these invoices in Xero, some of those actions sync back to Recruitly. For example, when you mark an invoice as paid in Xero, that payment status typically updates in Recruitly as well, allowing you to track paid invoices without leaving your recruitment platform. This bidirectional sync keeps both systems aligned and reduces the need to manually update records in multiple places.

The integration respects your Xero configuration and workflows. For example, if you've set up payment terms, email templates, or automated reminders in Xero, those settings apply to invoices created through Recruitly just as they would to any other Xero invoice. If you use Xero's bank feeds to automatically match incoming payments to invoices, those matching rules work normally with Recruitly-created invoices. The integration doesn't interfere with or override your existing Xero processes — it simply extends Xero's capabilities into your Recruitly workflow.

Disconnecting the Integration

If you need to disconnect your Xero account from Recruitly — for example, when migrating to a different Xero organization, restructuring your accounting setup, or discontinuing use of the integration — you can do so through the Marketplace.

Return to the Marketplace by clicking your user icon and navigating to the integrations section. Locate Xero in your list of connected applications and select the disconnect or uninstall option. Recruitly will prompt you to confirm this action, as disconnecting the integration has several immediate effects.

Once disconnected, Recruitly loses its access to your Xero account. The integration can no longer create invoices in Xero, sync invoice updates, or access client information. Any invoices you create in Recruitly after disconnection will remain in Recruitly only and will not be pushed to Xero. However, all invoices that were previously synced to Xero remain in your Xero account — disconnecting the integration doesn't delete or modify existing invoices, it simply stops future synchronization.

If you later decide to reconnect Xero, you'll need to go through the authentication and authorization process again, establishing a fresh connection between the systems. Your previous configuration settings may need to be re-entered as well, depending on how the disconnection was handled.

Understanding Data Flow and Synchronization

The Xero integration creates a structured data flow between Recruitly and Xero that maintains consistency while respecting the boundaries and purposes of each system. Understanding this data flow helps you use the integration effectively and troubleshoot any issues that might arise.

When you create an invoice in Recruitly, the system packages several types of data for transmission to Xero. First, it includes the invoice header information: invoice number, date, due date, reference numbers, and any notes or instructions. Second, it includes all line item details: descriptions, quantities, unit prices, tax rates, and account codes. Third, it includes client information: company name, billing address, email address, and contact details.

This data is transmitted to Xero through a secure API connection. Xero receives the data and performs several validation checks to ensure that everything conforms to Xero's data requirements and business rules. For example, Xero verifies that the specified account codes exist in your chart of accounts, that the tax rates match configured rates, and that the invoice number doesn't duplicate an existing invoice. If any validation issues arise, Xero rejects the invoice creation and returns an error message to Recruitly, allowing you to correct the problem and retry.

Assuming validation succeeds, Xero creates the invoice and assigns it a unique identifier in the Xero system. This identifier is passed back to Recruitly, creating a permanent link between the Recruitly invoice record and the Xero invoice record. This linkage is what enables ongoing synchronization — when you update the invoice in Recruitly, the system uses this identifier to locate and update the correct invoice in Xero.

The client information flow deserves special attention. When Recruitly sends an invoice to Xero, it includes the client company's details. Xero attempts to match this company to an existing contact in the Xero database using matching rules — typically comparing company names and potentially other identifiers. If a match is found, Xero links the invoice to that existing contact. If no match is found, Xero creates a new contact record and links the invoice to it. This automatic matching and creation process is generally reliable, but it can occasionally create duplicate contacts if company names vary slightly between Recruitly and Xero or if matching rules aren't precise. Monitoring your Xero contact list periodically and merging any duplicates helps maintain a clean database.

Status synchronization flows in both directions. When invoice statuses change in Xero — particularly payment-related statuses — those changes can be reflected back in Recruitly. The exact synchronization behavior depends on your integration configuration and which status changes trigger sync events. For example, when an invoice is marked as paid in Xero, that status typically updates in Recruitly, giving you visibility into which placements have been paid for. However, some status changes might not sync automatically, particularly if they're made through Xero's batch processing or import features rather than through the standard user interface.

This comprehensive understanding of data flow helps you use the integration effectively, anticipate how changes in one system affect the other, and identify the source of any issues that might arise in your invoice management workflow.