Melio automatically syncs your invoices, customers, and payments with Xero. Collect payments through Melio and have everything reconciled in your accounting system - no manual data entry needed.
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This article covers how Melio syncs invoices you send to your customers to collect payment. If you're looking for information about paying your own vendors' bills, see What data does Melio sync with Xero? instead.
In this article:
- Invoice types at a glance
- Full invoices (created in Melio)
- Light invoices (created in Xero)
- How to detect a light invoice in your Melio account
- When a full invoice becomes a light invoice
- Tax handling
- Default accounts
- Discounts
- How payment sync works
- Rules and limitations
Invoice types at a glance
The type of invoice you see in Melio depends on where it was originally created. Melio displays invoices in one of two formats to keep your data accurate and prevent sync errors.
| Full invoice | Light invoice | |
| Created in | Melio | Xero |
| Details shown | All line items, tax config, service charges | Customer name, total amount, due date, PDF generated by Xero |
| Edit in Melio | Yes | No - edit in Xero |
| Send & collect | Yes | Yes |
| Sync to Xero | Immediately on any change | Structural edits must be made in Xero |
Full invoices (created in Melio)
Full invoices contain all the details of the invoice you created in Melio, including individual line items, tax configurations, and service charge options.
You have complete control: you can edit, delete, send, and collect payments for them directly within Melio. Any changes sync to Xero immediately.
Light invoices (created in Xero)
Light invoices are created in Xero and synced to Melio. They show the essential summary information: the customer name, total amount, due date, and the invoice PDF generated by Xero.
To prevent data conflicts between the two systems, light invoices cannot be edited in Melio. Any structural changes - such as updating line items or tax settings - must be made directly in Xero. These invoices can still be paid or deleted if needed.
When you send a payment request for a light invoice, Melio attaches the original PDF from Xero. Your customer will see their complete, itemized breakdown exactly as it appears in Xero.
How to detect a light invoice in your Melio account
The light invoices (created in Xero) can be easily identified in your Melio account by following these steps:
1 - Select Get paid on the left sidebar.
2 - Select the Invoices tab.
3 - The light invoices will have a ‘Xero’ mark under the invoice number.
Alternatively, you can open the invoice and check the invoice source. For light invoices, the source is ‘Xero’.
When a full invoice becomes a light invoice
If you edit a Melio-created invoice in Xero and add attributes that Melio doesn't support, the invoice automatically converts to a light invoice. This ensures the invoice stays visible and payable in Melio rather than failing to sync.
The following Xero changes will trigger the conversion:
| Xero change | What it means |
| Description-only lines | Rows with text but no quantity or price |
| Manual tax overrides | Custom tax amounts manually set in Xero |
| Incomplete tax info | Line items marked as taxable but missing total tax |
| Missing/mismatched rates | Lines missing unit rates, totals, or math mismatches |
| Tax-inclusive invoices | Melio only works in tax-exclusive mode - any tax-inclusive invoice comes in as Light |
| Negative line amounts | Not supported by Melio |
| Multiple tax rates on one invoice | Invoices using more than one tax rate across their lines |
| Non-uniform discounts | A discount applied to only some lines, or at different percentages per line (see Discounts) |
Zero-rated / tax-exempt (0%) lines sync normally and do not trigger a downgrade to a light invoice when all line items use this rate.
Once an invoice switches to a light invoice, you can no longer edit it in Melio - but your customers can still pay it securely. To check this, open the Invoice details window and look for the banner as shown below:
Tax handling
- Xero invoices can be tax-inclusive or tax-exclusive. Melio only supports tax-exclusive invoices - a tax-inclusive invoice created in Xero will always sync to Melio as a light invoice.
- Tax rates can be created and deleted from either system, but they can only be edited in Xero. Tax rate editing is not available in Melio.
- If you create a new taxable catalog item directly in Melio, it syncs to Xero under a placeholder tax name - “Uncategorized Tax” at 0% - until you set the real rate on the Xero side.
Default accounts
Melio doesn't yet support choosing a general ledger (GL) account per line item for Xero. All synced invoice line items post to one default account: “Melio Uncategorized Item.”
Payments made in Melio post to a single default clearing account, “Receivable Payments Clearing,” for your accountant to reconcile manually.
Discounts
How a discount syncs depends on where it was added and which type it is:
- Percentage discount set in Melio: Melio only supports one uniform discount which applies at the same percentage to every line when synced to Xero.
- Fixed-amount discount set in Melio: syncs to Xero as an added invoice line labeled “Discount,” with a negative value equal to the discount amount. Melio doesn't support negative line amounts, so if this invoice is later edited in Xero, it downgrades to a light invoice.
- Discount added directly in Xero: comes into Melio labeled “General Discount.” If it isn't applied uniformly across every line, the invoice downgrades to a light invoice instead.
How payment sync works
After the invoice is paid, payments sync automatically between Melio and Xero, in both directions.
Here you can see exactly what happens in different payment scenarios:
| Event | Result |
| Customer pays via Melio | Invoice marked "Paid" in Xero; reconciliation complete |
| Payment recorded in Xero | Invoice status in Melio updates to "Marked as paid"; payment date, amount, and reference number logged in your Melio history |
| Payment deleted in Xero | Melio removes the payment and reopens the invoice |
Partial payment exception
- Partial payments are not supported at this time:
- Invoices with a partial payment recorded in Xero prior to the sync activation won't be synced to Melio.
- Invoices with a partial payment recorded in Xero after the sync activation will display the full invoice amount in Melio.
Rules and limitations
- Duplicate invoice numbers: Xero does not allow duplicate invoice numbers. An invoice created in Melio with a number that already exists in Xero will fail to sync.
- Currency: Melio only supports USD invoices.
- Invoice age: Invoices with a due date older than one year will not be synced to Melio.