Xero and Stripe integration

What moves between them

Invoices flow from Xero to Stripe for customer payment collection. When a customer pays through Stripe, the payment record flows back into Xero and is matched to the original Xero invoice, posting the receipt into the accounts receivable account. Customer records sync bidirectionally so Xero contacts align with Stripe customers, preventing duplicate customer master entries and keeping AR aging reports consistent between systems.

How ml-connector handles it

ml-connector stores Xero OAuth credentials and uses the Authorization Code flow to refresh tokens before they expire. For Stripe, it stores the API key encrypted and sends it via Basic Auth on every request. ml-connector subscribes to Xero webhook events (Invoice CREATE and UPDATE, Payment CREATE and UPDATE) and also polls Xero via If-Modified-Since to catch any events missed by webhooks. On the Stripe side, it listens for charge.succeeded and charge.refunded events and creates corresponding payment records in Xero. Because Xero requires the Xero-tenant-id header on all requests, ml-connector stores the tenant ID per customer and validates it before each call. Stripe payment records carry the Xero invoice ID so ml-connector can match payments to invoices and allocate the cash receipt correctly. If a Stripe webhook delivery to Xero fails due to a rate limit or transient error, ml-connector retries the payment write with exponential backoff and tracks the failure in the audit log so the sync can be replayed once the Xero API recovers.

A real-world example

A B2B SaaS company uses Xero for billing and AR and Stripe for online payment processing. Before the integration, the finance team exported invoices from Xero, manually created them in Stripe's invoicing system so customers could pay online, and then manually matched Stripe payments back to Xero invoices in a spreadsheet, causing cash application delays and AR aging mismatches that required weekly manual reconciliation. With Xero and Stripe connected, each Xero invoice automatically syncs to Stripe within seconds of creation, customers pay online in Stripe, and the payment posts into Xero's AR ledger matched to the original invoice, so the cash application is instant and the AR aging report is always accurate.

What you can do

• •Sync Xero invoices to Stripe for customer payment collection, with automatic invoice matching on payment.
• •Post Stripe charge events back into Xero as payment records, allocated to the correct AR account and invoice.
• •Keep Xero contacts and Stripe customers in sync bidirectionally to prevent duplicate customer master entries.
• •Authenticate Xero via OAuth2 and Stripe via API key, handling token refresh and encryption automatically.
• •Reconcile Xero and Stripe on a webhook-triggered schedule with polling fallback, including full audit trails and failure replay.

Questions

How does the integration match Xero invoices to Stripe payments?

ml-connector stores the Xero invoice ID on the Stripe charge when it syncs the invoice, and when a Stripe charge succeeds, it uses that stored ID to match the payment back to the original Xero invoice. The payment record is then posted to Xero's accounts receivable account, matched to the invoice, so the cash receipt resolves against the correct AR line item.

What happens if a Stripe webhook delivery fails?

ml-connector retries the Stripe-to-Xero payment write with exponential backoff up to a configured threshold. Every attempt is logged in the audit trail, including the error reason, so if the Xero API recovers (e.g., rate limit clears), the payment write can be replayed without losing data or creating duplicate postings.

Does the integration require any special setup in Xero or Stripe?

You must register ml-connector as an OAuth application in Xero to obtain the client ID and secret for the Authorization Code flow. For Stripe, you need a live or test API key from the Dashboard. ml-connector handles the rest: token refresh, webhook event subscriptions, and credential encryption.