Does Xero have a sales order feature?

Not in its standard accounting plans. Xero has quotes, invoices, repeating invoices and purchase orders, and its Accounting API has endpoints for each of those but none for sales orders. Sales orders do exist in Xero Inventory Plus, which Xero sells as an add-on for its US plans and which connects to Shopify and Amazon FBA. Elsewhere, wholesalers use a workaround or a separate order system.

Can I use Xero quotes as sales orders?

For simple, one-shot jobs, yes. A quote moves through Draft, Sent, Accepted, Declined and Invoiced, and an accepted quote converts to an invoice without retyping. The problems start when a customer changes the order after accepting it, or you ship it in parts. Xero's API documentation says an accepted quote can only have its contact details and notes edited.

Do draft invoices hold stock in Xero?

No. In Xero's own description of backorders, available stock is used when a sales invoice is approved. A draft isn't approved, so a pile of drafts used as open orders reserves nothing and can make stock look healthier than it is. Since August 2026 Xero can approve an invoice when stock is short and backorder the rest, but only for approved sales invoices.

What are Xero backorders and do they replace sales orders?

Backorders let Xero approve a sales invoice for a tracked item you don't have enough of. Available stock is used straight away, the rest goes on backorder and is filled oldest first as stock arrives. They help with stock shortfalls but don't cover order confirmation, credit checks before invoicing, or changing an order before it ships. Quotes and repeating invoices don't create backorders.

Which Xero apps add sales orders?

Several apps on the Xero App Store add sales orders and send invoices into Xero, mostly in its inventory and ordering categories. We don't rank them here because the right one depends on your pricing, warehouses and order channels. Test any of them with three of your own awkward orders, such as a part shipment, an amended order and a named-account price, before you commit.

When does a custom order system make sense with Xero?

When the order has to do things Xero isn't built for: customer-specific prices, orders from reps, a portal or emailed purchase orders, part shipments, and credit checks before goods leave. In that set-up the order system holds the order, and Xero receives one invoice per dispatch through its API. Xero stays your accounting system; nothing moves out of it.

Does Xero Have Sales Orders? What to Use Instead

Short answer: no. Xero's standard plans have quotes, invoices, repeating invoices and purchase orders, but no sales order document, and its Accounting API lists endpoints for quotes, invoices and purchase orders but none for sales orders. The only Xero product with sales orders is Inventory Plus, sold as an add-on to Xero's US plans for Shopify and Amazon FBA sellers. Everyone else uses quotes, draft invoices, the new backorders feature or a separate order system that sends invoices to Xero. Which one fits depends on whether your orders change, ship in parts or need a credit check before they leave.

From our side

When a wholesaler tells me Xero doesn't do sales orders, I ask where Tuesday's open orders are right now. The answer is usually a mix: some as quotes, some as draft invoices, a few in someone's inbox. The fix is rarely more Xero settings. It's deciding that the order lives in one place, and Xero gets an invoice only when goods leave.

— Avi Singh, Founder

What Xero gives you instead of a sales order

A sales order is a promise between "the customer asked" and "we invoiced". It holds quantities that can still change, stock that is spoken for, and lines that are still to follow. Xero has documents that each cover part of that, but none covers all of it.

Xero document	Who it's for	What it does well	Why it isn't a sales order
Quote	Customer	Five stages from Draft to Invoiced; the customer accepts online; converts to an invoice without retyping	Through the API, an accepted quote's lines can't be edited; no part shipments; holds no stock
Draft invoice	Customer	Fully editable; can carry the order number in its reference	Not approved, and approval is the point where Xero uses up tracked stock, so a draft holds nothing
Approved invoice with backorder	Customer	Uses available stock at once; the shortfall is filled oldest first as stock arrives	The customer is invoiced before goods leave; it records no order changes or order confirmation
Purchase order	Supplier	Orders stock in, becomes a bill	It's for buying, not selling; it can't hold a customer's order
Repeating invoice	Customer	The same lines on a schedule	Standing orders only; no backorders from them

Two details from Xero's own documentation decide most of this. First, the Quotes API sets which fields can change in each status: in Draft and Sent, all of them; once a quote is Accepted or Invoiced, only contact details and notes. An accepted quote can be set back to Sent and edited again, but then your record no longer shows what the customer actually agreed to. The Xero app may allow more editing than the API does, but either way a quote holds one version of the order and nothing about what has shipped. Second, Xero's developer blog (18 August 2026) says that, in this release, backorders are created from sales invoices only. Quotes, receive-money transactions, repeating invoices and inventory adjustments don't create them.

The four workarounds, compared

Workaround	Works when	Breaks when
1. Quotes as orders	Each order is priced, agreed and delivered in one go, such as a job or a one-off pallet	Customers add lines after saying yes, you ship in parts, or the warehouse needs a pick list before the invoice exists
2. Draft invoices as orders	A small team, few changes, and stock you check by eye	Drafts don't use up stock, so twenty open drafts can promise the same last case twice. Drafts are also easy to approve by mistake before goods leave
3. Invoice at order, backorder the rest	Customers accept being invoiced when they order, and shortfalls are routine	You need a credit check before invoicing, customers amend orders, or your terms start from delivery. Credit notes pile up for every change. Canada and Singapore aren't supported yet
4. An order layer in front of Xero	Orders arrive from reps, a portal, email or phone; prices vary by customer; part shipments are normal	It costs more than a setting change, so it's overkill if workarounds 1 to 3 already cope

Workaround 3 is new. Xero's developer blog says that until backorders, the options for selling a tracked item you didn't have enough of were draft invoices, manual adjustments or a spreadsheet. Now Xero can approve the invoice, use what's available and fill the rest later, and the invoice can be paid before the stock arrives. Through the Invoices API it is opt-in: a request that would create a backorder fails with an "Insufficient stock" message unless the app sends allowBackorders=true. If a connected app pushes invoices to your Xero, ask its supplier whether they have switched this on, because the same order can behave differently when keyed by hand and when synced.

The UK VAT side: when you invoice changes when VAT is due

For UK VAT-registered sellers, choosing between workarounds 1 to 4 is also choosing a tax point. Under VAT Notice 700, section 14.2.1, the basic tax point for goods is usually the date you send them to the customer or the customer takes them away. Section 14.2.2 adds that if you issue a VAT invoice before then, the tax point for the amount invoiced is the invoice date. So workaround 3, invoicing at order and backordering the rest, brings VAT forward to the day of the order, for goods that may not ship for weeks. Invoicing per dispatch keeps the tax point with the goods.

Two smaller points follow from the same guidance. If you want to send customers something that looks like an invoice before they pay, section 17.3 says a pro-forma should be clearly marked "this is not a VAT invoice". And VAT Notice 700/21, section 3.1, says you normally have to issue a VAT invoice within 30 days of the supply, so a balance left uninvoiced on an order for weeks after it ships is a problem in its own right. Your accountant can tell you how this lands for your business; the system point is that the invoice should be raised by the dispatch, not by whoever remembers.

Which workaround fits your orders?

Tick everything that is true of a normal week. It takes about thirty seconds, and the result tells you which workaround you have already outgrown.

Customers change orders after placing themExtra cases, swapped lines, "add this to Tuesday's" Orders often ship in partsSome lines now, the rest when stock lands Accounts need a credit check before goods leaveCredit limits, stop lists, pro-forma customers Some customers have their own pricesPrice bands, named-account deals, volume breaks Orders arrive from reps, email, phone or a websiteAnything other than you typing them straight in The warehouse needs a pick list before the invoicePicking happens before anyone invoices Customers expect an order confirmationSeparate from the invoice, often quoting their PO Stock sits in more than one placeSecond warehouse, van stock, a 3PL

Tick what is true of your orders in a normal week.

Send me what my ticks mean for my Xero set-up

Your ticks go into the message for you. Add your name and email, and we reply by email with the workaround we'd use and why. Nothing is sent until you press send.

If you add an order layer, what should Xero receive?

The rule we use is simple: the order lives in the order system, and the money lives in Xero. The order system handles the parts Xero doesn't, such as quantities that change, picking, part shipments and credit checks. Xero gets a clean sales invoice each time goods actually leave. Done that way, nobody edits or credits invoices because a customer changed their mind on Tuesday.

Back-office order screen for a catering supplies wholesaler showing sales order SO-0214 for Harbour Stores, customer PO HS-55821, marked part dispatched with 6 of 8 lines sent. Two lines are still to follow, 15 paper cups and 25 kraft bags worth £665.75. A Xero panel shows invoice INV-2291 for the £2,814.00 dispatched, with a link back to the order, and the balance not yet in Xero. A history list records a quantity change from 30 to 40 made before dispatch. — One order, two dispatches. The quantity change happened before anything reached Xero, so there was no invoice to correct. Illustrative screen, sample data.

Five things to check in any order layer, ours or anyone else's:

One invoice per dispatch, for dispatched quantities only. The balance stays on the order until it ships. If you'd rather invoice at order, use Xero's backorders for the shortfall rather than inventing a second system for it.
The order number and customer PO on every invoice. The Invoices API has a Reference field on sales invoices, and apps can look invoices up by it, so "HS-55821" stays attached to the invoice in Xero instead of living only in the order system.
A link back to the order. The same API has a Url field that Xero shows as "Go to [app name]" on the invoice. It costs nothing to fill in and saves a phone call every time someone asks what was actually ordered.
A digital link, not retyping. HMRC's Making Tax Digital notice, section 3.2.1, counts API transfer as a digital link and copy-and-paste as not one. An order layer that writes invoices into Xero through the API keeps that chain intact.
Stock kept in one place. If the order layer tracks stock by warehouse, don't also track those items as inventory in Xero, or the two will drift. Pick one owner of the stock figure and let the other report it.

For how orders get into the order layer in the first place, see AI order processing for emailed purchase orders and the B2B ordering portal for customers who order themselves. If you're weighing a subscription app against a build, B2B ordering portal cost walks through the three-year sums. On QuickBooks instead? Does QuickBooks Online have sales orders covers which plans have them.

How we'd approach it

We build order systems that sit in front of accounting software and connect to Xero, Sage and QuickBooks through their official APIs. You own the code and the data, with CSV export at any time. We don't start from nothing: a trade portal we built covers sales and warehousing and is used every day by a UK wholesaler.

The route is the same each time. A 20-minute walkthrough, then a fit check of your products, customers, price lists and warehouses. After that comes set-up and import on a fixed plan and timeline, then training and close support through the first weeks of live orders. You get a fixed quote after the walkthrough, with the full cost known before work starts and run costs listed separately. If the checker above says Xero alone will do, we'll say the same on the call.

Book a 20-minute walkthrough or send us one awkward order, such as a part shipment or an order changed after it was placed. We'll show you where it would live and what Xero would receive.

Sources

Xero Developer, Accounting API overview: list of endpoints (accessed 22 October 2026)
Xero Developer, Quotes: valid status changes and status-based editable fields (accessed 22 October 2026)
Xero Developer, Invoices: allowBackorders, Reference and Url fields (accessed 22 October 2026)
Xero Developer, Purchase Orders (accessed 22 October 2026)
Xero UK, Purchase order software: turning an approved purchase order into a bill (accessed 22 October 2026)
Xero Developer Blog, Backorders are coming to the Invoices API (18 August 2026)
HMRC, VAT guide (VAT Notice 700), sections 14.2.1, 14.2.2 and 17.3
HMRC, Record keeping (VAT Notice 700/21), section 3.1
HMRC, VAT Notice 700/22: Making Tax Digital for VAT, section 3.2.1
Xero UK, Quotation software: quote stages and quote-to-invoice conversion (accessed 22 October 2026)
Xero App Store US, Xero Inventory Plus: sales orders, channels and availability (accessed 22 October 2026)

Last reviewed 22 October 2026. Xero changes features often; check the pages above on the day you decide. This guide doesn't rank or recommend Xero apps, and it isn't tax advice.

Does Xero have sales orders? What it has instead, and where each workaround breaks