Manually entering invoices into accounting software like Xero might seem manageable at first — until you’re doing it every day, for dozens of emails, under tight deadlines. That’s exactly what one small retail business was facing. Their accounts team was overwhelmed with the daily grind of downloading invoice PDFs, extracting key details, and inputting everything into Xero — all by hand. It was not only inefficient but also led to delays and occasional errors that impacted vendor relationships and reporting accuracy.
I recently stepped in to automate this process end-to-end using n8n, OpenAI, and Xero’s API. The result? A fully automated invoice pipeline that now runs quietly in the background — no human intervention required.
The Problem: Manual Invoice Processing Was Slowing Them Down
The business received multiple invoices every day, each landing in a shared Outlook inbox. The original workflow looked like this:
Open each email and locate the attached PDF.
Manually read the invoice and extract fields like the vendor name, invoice number, date, due date, and total.
Log in to Xero and re-type every detail into the system.
Repeat this process for every invoice, every single day.
This process was not scalable. It was wasting valuable time and increasing the risk of mistakes like typos or missed entries — especially when team members were busy or juggling multiple tasks.
The Solution: Full Workflow Automation Using AI + n8n + Xero
To solve the issue, I designed a fully automated system using n8n as the workflow engine, OpenAI for document intelligence, and Xero for accounting integration.
Here’s how the new system works:
1. Email Monitoring
The automation checks the shared Outlook inbox at regular intervals. If an email contains a PDF invoice, it downloads the attachment and moves forward. If not, it skips the email — no wasted effort.
2. Intelligent Data Extraction
Rather than relying on rigid templates or OCR tools, I used OpenAI’s language capabilities to read each invoice and intelligently extract important fields like:
Vendor name and address
Invoice number
Currency
Invoice date and due date
Line items and total amount
The AI understands different invoice layouts, so it works even if two vendors format their documents differently.
3. Vendor Matching in Xero
The automation then checks Xero to see if the vendor already exists. If not, it automatically creates a new contact based on the invoice details. No manual data entry required.
4. Invoice Creation
Using Xero’s API, the workflow creates a new invoice with all the correct line items, due dates, and account codes. It even connects to Xero’s chart of accounts to ensure everything is properly categorized.
5. Slack Notification
Once the invoice is successfully created in Xero, a Slack message is sent to the accounts team to confirm it. This way, they stay in the loop without needing to lift a finger.
Flexible Enough for Any Invoice Design
The beauty of this setup is that it’s robust. Whether the invoice comes from a large vendor with a clean layout or a small supplier using a basic PDF template, OpenAI can still extract the correct data without needing custom parsing rules.
This means the system doesn’t just save time — it adapts as the business grows and works with a wide range of vendors.
The Impact
Since implementing this automation, the business has eliminated hours of repetitive work each week. The accounts team no longer needs to touch every invoice manually. Human errors? Gone. Delays? Gone.
Now, invoices move from inbox to Xero automatically — within minutes.
Final Thoughts
This project is a great example of how AI and no-code automation tools like n8n can completely transform repetitive business workflows. You don’t need to be a large corporation or have a big IT budget to benefit from automation.
If you’re still entering invoices manually — or spending too much time on routine tasks — there’s a smarter, faster, and error-free way to handle it. Let automation do the heavy lifting, so your team can focus on what really matters.
Want to explore how this could work for your business? Let’s talk.
