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Post invoices as Draft or Approved
Every invoice the app creates in Xero arrives as either a Draft or an Approved. You can pick exactly which, on Setup - Advanced under Post invoices as Draft or Approved.
What does Draft and Approved means in Xero
A Draft invoice is parked in Xero. It waits there for you, stays out of your books, and you can change anything on it. An Approved invoice is the real thing: it counts towards your numbers straight away and behaves like any invoice you would raise yourself.
| In Xero | Draft | Approved |
|---|---|---|
| Shows in your reports | No | Yes |
| Counts towards what you’re owed | No | Yes |
| Can have a payment added | No | Yes |
| Free to edit | Yes | Limited |
What this setting applies to
This setting do not decide which orders auto sync to Xero — your auto sync settings do that.
What it decides is how each order will be created once it is synced to Xero. As an order syncs, the app checks whether the Shopify order is unpaid or paid and chooses accordingly.
| The order in Shopify | Invoice status used to create in Xero | Default |
|---|---|---|
| Unpaid orders | Payment pending in Shopify | Draft |
| Everything else, usually paid orders | All other orders | Approved |
Case example
Say your trade customers buy on 30-day terms, ordering on account rather than paying by card. Shopify marks those as payment pending, so on the starting setup each one parks in Xero as a draft.
That keeps them out of your books entirely. You cannot see what you are owed, Xero will not chase anyone, and when the money arrives three weeks later there is no invoice ready to receive it until you approve it by hand. Switching Payment pending in Shopify to Approved changes all of that — the invoice is live from the moment the order comes in, and Xero can do the chasing.
If you would rather look over every invoice before it touches your books, leaving both on Draft is a perfectly good choice, as long as you are happy adding the payments yourself.
Whichever you pick applies to orders that sync from then on. Invoices already in Xero keep the status they were given.
If you choose Draft
Xero will not accept a payment against a draft invoice. Anything you leave on Draft therefore arrives on its own, without the payment or the gateway fees that came with it. You will need to approve the invoice in Xero and add those yourself.