How to Offer Instalment Payments on Your Xero Invoices in Under 5 Minutes
If you invoice NZ businesses through Xero, you can give your customers the option to pay in three instalments — without changing how you work, without a developer, and without any complicated setup.
Why Would I Want to Offer Instalment Payments on My Xero Invoices?
Most NZ businesses using Xero send invoices and wait — 30 days, 60 days, sometimes longer. Customers either pay in full when it suits them, ask for extended terms, or go quiet altogether.
Offering instalment plans changes that dynamic. Instead of a customer sitting on a $10,000 invoice because the timing isn't right, they can commit to paying it in three manageable chunks. You get paid faster. They get flexibility. And nobody has to have an awkward conversation about it.
Win orders you'd otherwise lose
Customers who can't pay in full upfront will often say yes when you offer a payment plan. Instalments can be the difference between getting the order and losing it to a competitor.
Reduce late payments
A structured instalment schedule gives customers a clear commitment to stick to. It's far easier to pay three smaller amounts on set dates than to find the full sum at once.
Stop managing it manually
When customers pay in instalments through PaidTerms, the collection is handled automatically. No chasing, no reminder emails, no tracking in a spreadsheet.
Enable bigger orders
Customers who know they can spread a large invoice over 90 days are more likely to place bigger orders. Instalment options directly increase average order value for many NZ suppliers.
What Do You Need to Get Started?
Very little. Here's the full list:
A Xero account
You need to be using Xero to raise invoices for your NZ business customers. PaidTerms connects to your existing Xero — no changes to your setup required.
A PaidTerms account
Free to create at paidterms.co.nz. You choose whether you want to receive each instalment as it arrives, or get paid upfront in full.
NZD invoices
PaidTerms currently supports NZD invoices only. If your invoices are raised in NZD through Xero, you're ready to go.
About 5 minutes
That's genuinely all the setup takes. No developer, no API configuration, no lengthy onboarding process. You connect through Xero's standard login screen and you're live.
How to Set It Up — Step by Step
Here's the full process from signing up to sending your first instalment offer, start to finish.
Create your PaidTerms account
Go to paidterms.co.nz and sign up. It's free to get started. During signup you'll choose whether to receive each instalment as it lands, or get paid upfront in full — PaidTerms funds the instalments on your behalf.
Connect your Xero account
From your PaidTerms dashboard, click "Connect Xero." You'll be taken to Xero's standard login screen — the same one you use every day. Authorise the connection and you're done. No API keys, no developer, no technical setup.
(If paid upfront) Map your Xero accounts
If you're being paid upfront, you'll choose which Xero bank account incoming payments should post to, and which expense account PaidTerms fees should be recorded against. This takes about 60 seconds and only needs to be done once.
Your outstanding invoices appear automatically
Once connected, your unpaid Xero invoices show up inside your PaidTerms dashboard — customer name, invoice number, and amount included. You don't import anything or re-enter any details.
Send your first instalment offer
Find the invoice you want to offer instalments on. Click "Offer instalments." A branded email goes to your customer pre-filled with their invoice details and a link to start their payment plan. That's it — you're done.
Optional: embed your pay link in your invoice template
Download a branded Xero invoice template with your PaidTerms payment link already embedded. Use this when raising new invoices in Xero and every PDF your customer receives will include a "pay in 3 instalments" option — no separate email required.
Total time from signup to first offer sent: Most NZ businesses are live and have sent their first instalment offer within 5 minutes of creating their account.
What Does My Customer Actually See?
When your customer receives the instalment offer email, here's their experience:
They receive a branded email from you
The email arrives in your customer's inbox with your business branding. It tells them their invoice number, the total amount, and that they have the option to pay in three instalments. There's a single button to get started.
They enter their invoice number to confirm
On the PaidTerms payment page, they enter their invoice number. PaidTerms checks the amount live from your Xero account and confirms it back to them. They always see the exact figure you invoiced — no risk of error.
They set up their payment schedule
The customer enters their card details and confirms the instalment schedule. PaidTerms collects each payment automatically on the agreed dates — your customer doesn't need to remember to do anything.
You get paid — automatically
If you're paid as instalments land, each one arrives in your account on schedule. If you're paid upfront, you receive the full invoice amount the moment your customer confirms their plan — PaidTerms handles the rest.
Which Option Is Right for Me?
Both connect to Xero the same way. The difference is when you get paid.
Receive each instalment
You offer your customer a payment plan. They pay in three instalments. You receive each one as it arrives.
- Connect Xero in 2 minutes
- Send offers from your dashboard
- Live invoice validation from Xero
- Branded invoice template
- Automatic payment collection
- No clearing account setup required
Get paid upfront in full
Your customer pays in instalments. But you receive the full invoice amount on day one — PaidTerms funds the gap.
- Everything in the direct option, plus:
- Full payment on day one
- Zero bad debt exposure
- Automatic Xero reconciliation
- Fee posting to expense account
- "Pay with PaidTerms" button in Xero
- Real-time two-way sync
PaidTerms vs Doing It Yourself — At a Glance
| Task | No payment plan tool | PaidTerms + Xero |
|---|---|---|
| Offering payment flexibility | Manual — phone calls, custom arrangements per customer | One click from your dashboard |
| Invoice amount confirmation | Customer reads PDF — errors possible | Confirmed live from Xero |
| Collecting each instalment | You chase manually | Automatic — no action required |
| Tracking payment schedules | Spreadsheet or memory | Managed inside PaidTerms |
| Reconciling payments in Xero | Manual — end of month | Automatic if paid upfront, simplified either way |
| Getting paid upfront | Not possible with trade credit | Available as an option |
| Setup time | N/A | Under 5 minutes |
Common Questions
Can I offer instalment payments on my Xero invoices?
Yes. That's exactly what PaidTerms is built for. You connect PaidTerms to your Xero account, and your outstanding invoices appear in your PaidTerms dashboard automatically. From there you can send a "pay in 3" offer to any customer in one click, with the invoice amount confirmed live from Xero.
How long does it take to set up?
Under 5 minutes if you're paid as instalments land. Being paid upfront adds a couple of extra steps, choosing your clearing account and expense account in Xero, which adds about 2 minutes. Most businesses are live and have sent their first instalment offer well within 10 minutes of signing up.
Do I need a developer or any technical knowledge?
No. PaidTerms connects to Xero through Xero's standard login screen, the same one you use every day. There are no API keys, no configuration files, and nothing technical to set up. If you can log into Xero, you can connect PaidTerms.
Do I need to change how I raise invoices in Xero?
No. Keep raising invoices in Xero exactly as you do now. PaidTerms reads your outstanding invoices automatically. You don't need to tag, flag, format, or export anything differently.
What are the two ways I can get paid?
Both let you offer instalment plans on your Xero invoices. With the direct option, you receive each instalment as it arrives. With the funded option, PaidTerms pays you the full invoice amount upfront on day one. Your customer still pays in instalments, but you don't wait. The funded option also includes full automatic Xero reconciliation, a "Pay with PaidTerms" button inside Xero, and real time two way sync.
What does my customer have to do?
They receive a branded email with a link to start their payment plan. They click the link, enter their invoice number (which is confirmed live from your Xero), enter their card details, and confirm the schedule. From there, PaidTerms collects each instalment automatically. Your customer doesn't need to remember to do anything.
Does PaidTerms work with all Xero invoices?
PaidTerms works with authorised, unpaid NZD invoices in Xero. Invoices in other currencies are not currently supported. Voided or already paid invoices cannot be used for instalment plans.
Is there a cost to use PaidTerms?
PaidTerms charges a platform fee per transaction. The fee structure depends on the plan you choose. Visit paidterms.co.nz for current pricing. There is no monthly subscription fee to get started.
Can I use the pay link on invoices I send directly from Xero?
Yes. PaidTerms provides a branded Xero invoice template with your payment link already embedded. Use this template when raising invoices and every PDF your customer receives will include a "pay in 3 instalments" option. They can click straight from the invoice without needing a separate offer email from you. PaidTerms users also get a native "Pay with PaidTerms" button that appears directly on Xero invoice PDFs.
Related Topics
For full automatic reconciliation and upfront payment, see how to offer instalment payments on Xero invoices.
To learn what business instalment payments are and how they work for NZ businesses, see What Are Business Instalment Payments?
