Summary
You can take a credit application online today with a form builder and an e-signature tool, then type the approved customer into Xero as a contact with a credit limit. The weak points are the handovers: unsigned terms, unchecked references and details retyped wrong. A joined-up flow removes them.
- In Xero: Xero has a credit limit field under Sales defaults on each contact, and an option to block new invoices when the limit is reached.
- The open choice: Add the contact to Xero when you invite the applicant, or only after approval. Each choice has a cost.
- Online with Paidnice: Paidnice is running a beta program for credit applications, open to anyone interested.
A new customer sends back your PDF credit application with the signature page missing. You start to type their details into Xero, and Xero tells you the contact name must be unique, because a contact with that name already exists from a quote last month.
Here is how Xero users take credit applications online today, what goes wrong at each step, and what a joined-up online flow looks like.
How do Xero users take a credit application online today?
Most Xero users take a credit application online by joining three or four separate tools: a PDF or form, an e-signature tool, email for references, and Xero itself. Xero does not have a built-in credit application form.
The usual workflow looks like this:
- Send the applicant a PDF or a fillable form. Some suppliers move the PDF into an online form builder so the answers arrive as a list.
- Send your terms of trade, and any personal guarantee, through an e-signature tool.
- Email or phone each trade reference, and wait for replies.
- Decide on the account and the credit limit.
- Type the new contact into Xero, add the credit limit, and save the signed documents somewhere you can find them again.
Between each step, a person carries information from one tool to the next. If you have not built the form yet, our credit application form template lists the sections to include.
Free: Payment reminder email templatesCopy the reminder emails for before, on and after the due date.What goes wrong at each step?
Each step of a manual credit application workflow has its own failure: forms come back half filled, terms go unsigned, references go unchecked and details are retyped wrong.
- Lost or half-filled PDFs. A PDF cannot make a field required. The applicant skips the company number or the accounts payable email, and you find out when you need it.
- Unsigned terms. The form arrives through one tool and the signature through another. Sales opens the account on the form alone, and the terms are still sitting unsigned in the applicant's inbox.
- References never checked. Chasing two or three referees by email takes days. Under pressure to ship the first order, the check gets skipped. Our guide to trade references covers what to ask.
- Details retyped wrong. Every field copied from the form into Xero is a chance for a typo in an email address or a duplicate contact.
- No record of which terms they signed. If you update your terms next year, a signed PDF in a shared drive may not say which version this customer accepted.
You usually find these gaps months later, when an invoice is overdue and you need the guarantee, the right email address or the signed terms.
How do you create a Xero contact from a credit application?
You create a Xero contact from a credit application by adding a new contact and copying the approved details into Xero's contact fields, including a credit limit under Sales defaults.
Xero's contact fields guide sets out what each field holds. The fields that map to a credit application are:
| From the application | Xero contact field | Note from Xero |
|---|---|---|
| Legal or trading name | Contact name | Must be unique |
| Accounts payable contact | Primary person and email | Up to five additional people per contact |
| Company number | ABN and ACN (Australian organisations), or Account number | Account number takes letters and numbers |
| Billing and delivery address | Billing address, Delivery address | Billing address shows on transactions |
| Agreed payment terms | Invoice due date (Sales defaults) | Can be overridden per invoice |
| Approved limit | Credit limit amount (Sales defaults) | In your base currency |
Xero's guide to setting a credit limit for a customer says you can set the limit when you add the contact. You can also tick "Block new invoices when credit limit is reached". With a block in place, new invoices save as drafts until the customer is back within the limit.
Setting a credit limit in Xero needs the administrator, standard or sales user role. To pick the number, see how to set a credit limit.
Should you add the contact to Xero at invite or after approval?
Suppliers can add the applicant to Xero as a contact when they send the credit application, or only once it is approved. Both work, and each has a cost.
Add the contact when you invite. The customer exists in one place from day one, so quotes, cash sales and the application all sit on one record. The cost is clutter: applicants who never finish stay in your contact list. A sales user may also invoice them on account before you approve. A credit limit with a block helps here.
Add the contact after approval. Your contact list holds only approved customers, and nobody can invoice an applicant by mistake. The cost is a second record to keep in step. Any quote raised during the application needs a contact, and that is how duplicate contacts start.
One simple rule: if the customer is already buying from you on cash or card, add them at invite and set a limit of zero. If they are new to you, add them after approval. Write whichever rule you pick into your credit policy so everyone follows it.
Which online credit application approach fits your business?
There are four common ways to take a credit application online, from a PDF by email to dedicated credit application software. The right one depends on how many accounts you open and how much checking you do.
| Approach | Strengths | Limits |
|---|---|---|
| PDF by email | No new tools; the applicant can print and sign | No required fields, signatures separate from answers, every detail retyped into Xero |
| Online form builder plus e-signature | Required fields, answers arrive as data, signatures tracked | Two tools to join, references still chased by email, the Xero contact still typed manually |
| Dedicated credit application software | One flow for form, terms, guarantees and checks | Another system beside your AR tool; check what reaches Xero |
| Paidnice beta | Application, references and signed terms on the customer record in your AR tool | A beta program, not a general release |
Dedicated tools differ by market. In New Zealand and Australia, 1Centre describes itself as a Trans-Tasman trade credit platform, and CreditWorks offers ApplyPlus for credit applications completed online in your branding. In the US, Bectran lists credit applications within its credit and AR platform, and Credit Pulse offers a digital credit application for B2B teams.
Ask each how an approved applicant becomes a contact in your Xero organisation.
Is an online signature valid on a credit application?
An online signature on a credit application can meet a legal requirement for a signature in New Zealand, if it identifies the signer and shows their approval, and is reliable enough for the purpose.
That test is in section 226 of the Contract and Commercial Law Act 2017. Section 227 has separate rules when a signature must be witnessed, which matters for some guarantees.
In practice, keep the evidence with the application: the signer's name and role, the date and time, and the exact terms they saw. Our guide to director personal guarantees covers what the guarantee should say. This is not legal advice: ask a lawyer to review your own terms and guarantee.
What does a joined-up online credit application flow look like?
A joined-up online credit application flow keeps the form, the references, the signature and the customer record in one place, so nobody carries details from one tool to the next.
- Invite the applicant from the customer record with one link.
- The applicant fills in their business, directors and references, with required fields.
- Company details come from the official register, such as the NZ Companies Office, instead of being typed in.
- Referees get a short form by email, and their answers land on the application.
- The applicant signs your terms, and a copy of the exact text is kept with the signature.
- You approve, set the limit, and the customer can buy on account.
Before you approve, run the applicant through the five Cs of credit. Our guide to opening a trade account covers the full decision.
How do you take credit applications online with Paidnice?
Paidnice is running a beta program for credit applications, open to anyone interested. You can join it on the credit applications page by leaving your email.
What we are building: you choose the form sections (business details, directors, personal guarantees and trade references) and write your own terms. You invite the applicant from the customer record. Unfinished applicants get a reminder after 3 days, then once more after a week. You are notified when an application comes in.
The applicant fills in four steps in your branding: Your business, Directors, Trade references and Terms. Referees are emailed a short form automatically. Signing records the date, the IP address and a copy of the exact terms. We plan to fill in company and director details from registers such as the NZ Companies Office and UK Companies House.
Once a customer is approved, Paidnice gives them a credit score from 0 to 100 based on how they pay you. The credit limit you set in Paidnice syncs with the credit limit field in Xero. If the customer goes over it, Paidnice can raise an escalation, which can lead to a credit hold.
💡 Paidnice insight
The credit application is the one moment a new customer is keen to give you information. Every detail you collect then, from the accounts payable email to the signed terms, is a detail you do not have to chase when the first invoice is late.
Frequently asked questions
Does Xero have a credit application form?
No. Xero stores contacts and can hold a credit limit for each customer, but it does not send or collect credit applications. Suppliers use a separate form, e-signature tool or credit application software.
Does Xero have a credit limit for customers?
Yes. Set it under Sales defaults on the contact, in your organisation's base currency. You can also block new invoices when the limit is reached, so they save as drafts.
Can I import credit applications into Xero?
Xero can import new contacts from its CSV template, so a form builder export can become several contacts at once. Xero says you cannot delete imported contacts, only archive them, so test the file in the demo company first.
Should a sales rep be able to open a credit account?
A sales rep can send the application, but someone in finance should approve it and set the limit. Write who approves which limits into your credit policy.
What is the difference between a digital credit application and a PDF?
A digital credit application collects answers as data, with required fields and an online signature in the same flow. A PDF needs printing or a separate signing tool, and its answers are typed into Xero manually.
Paidnice features in this article
About the editorial team
Jack is a co-founder of Paidnice and has built accounting software for more than 10 years. He builds the product that sends reminders, adds late fees and takes payments for businesses on Xero, QuickBooks and ERPs such as NetSuite and Business Central.
Ashley is a co-founder and lead developer of Paidnice and has built accounting software for more than 10 years. He builds the ledger connections that put reminders, late fees and payments into Xero, QuickBooks and ERPs such as NetSuite and Business Central. Before Paidnice he co-founded A2X, ecommerce accounting software for Xero and QuickBooks.
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