How to Oncharge Xero Subscriptions to Your Clients the Easy Way

Passing on the cost of Xero to your clients sounds simple, but in practice, it’s anything but. Many firms still rely on spreadsheets, manual invoice updates, and best guesses to keep things up to date. When plans change or Xero increases its prices, it’s easy to miss something. And that usually means losing revenue.

As Trent McLaren put it in a recent session, “It’s really annoying and difficult, and has been for a very long time. It gets especially tricky when price increases come through, which we can’t control.”

This blog walks through the common ways firms are currently handling Xero disbursements, the problems each approach creates, and how Rechargly solves them with automation, accuracy, and flexibility.

This blog is based on a recent webinar. If you'd rather watch, here's the recording.

Why oncharging Xero is harder than it looks

At the start, most firms keep things simple. Maybe they add their Xero disbursement to Xero XPM and bill it later. Maybe they use repeating invoices. Maybe they bundle it in with everything else. But these workarounds have limits.

The challenge starts when clients switch plans, add payroll, or change user counts. “When Xero turns their prices, what ends up happening?” asked Alex Millar, co-founder of Rechargly. “Someone has to go through, review all those repeating invoices, and update the pricing.”

Not only is that time-consuming, but it’s also prone to mistakes. Small gaps build up over time. A missed $40 adjustment here or a forgotten add-on there might not seem like much, but across 100 clients over a year, it adds up.

“We audit those costs for the last year,” Alex said. “On average, we’ve seen people underbilling between $300 to $400 a month.”

The result is often a choice between two bad options: chase the client for backpay, or take the hit yourself. “No one really wants to have that conversation,” Alex admitted. “You end up taking that as a loss.”

The manual options most firms rely on (and where they fall short)

There are three main ways firms currently try to manage Xero oncharges. Each comes with trade-offs.

Work in Progress (WIP) through Xero Practice Manager

Larger firms often use XPM to manage software disbursements, treating them as Work In Progress. The firm takes on the Xero cost upfront and adds it to a client’s bill later.

This creates cash flow issues, particularly when invoices are sent irregularly. "Unless you're regularly invoicing, that money takes a fair bit of time to come back into the business," Alex said.

And because these charges are buried in a job, the admin burden increases. "There is a lot of admin around actually going through and collecting that money."

Repeating invoices

This approach automates some of the invoicing process, but still requires someone to manually update pricing when plans or charges change. That includes things like payroll add-ons or pro-rata adjustments that don’t always show up clearly.

“The admin team has to go through and review everything,” said Alex. “It’s just more time spent checking for updates every month.”

Bundled fees

For smaller firms, bundling might seem like the easiest option. But the value of this approach starts to shrink as clients grow and adopt more tools.

“If you’re working with clients that are growing or changing plans,” said Alex, “then those costs quickly start to eat into your margin.”

It also puts you in a tricky position with pricing. Do you increase the overall fee and risk pushback? Or absorb the extra cost?

“Either way, you're having an awkward conversation,” said Trent. “Do you want to have it on the software, or on your overall fee? Or do you just lose money?”

How Rechargly simplifies Xero oncharges

Rechargly is built to handle all the heavy lifting for you. It automatically reads your Xero partner invoice, captures every line item, and maps each one to the right client in your Xero org.

Once mapped, those charges are never missed again. The platform creates draft invoices you can review, approve, and send, all within minutes.

“If you’re changing plans or anything like that, it gets updated automatically,” said Alex. “So you never have to think about doing that work again.”

You also get control over what the client sees. Internally, you’ll have a full breakdown of every charge. But on the client’s invoice, it can be collapsed into a single line item like “Software charges – $79.48 per month.”

“There’s just less for the client to push back on,” said Alex. “It’s cleaner and easier to explain when things change.”

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