If you track time to bill clients, the slowest part is rarely the tracking. It is the retyping: copying hours out of one tool and into Xero, line by line, hoping you did not fat-finger a rate. This guide shows how to send tracked time straight to Xero as a draft invoice you review before sending, with the descriptions your team actually wrote.
The short version
Connect Xero once, track time against a client and project, then create an invoice from those entries. Hour Cap builds the line items, applies the rate, and pushes the result to Xero as a draft. You open Xero, give it a final look, and hit send. Nothing leaves your accounting system without your sign-off.
Step 1: Connect Xero
On the Team plan or above, connect your Xero organisation from settings. On connect, Hour Cap syncs your contacts, sold items, tax rates, revenue accounts, branding themes and tracking categories. Contacts are matched to your clients by name, and any customers that only exist in Xero are created locally so you can start billing them immediately. You only do this once; tokens refresh automatically.
Step 2: Track time against a client and project
Log time with the timer or enter durations by hand using formats like 1h30m, 1:30 or 1.5. Each entry carries a description, which becomes the detail your client sees. The billable rate resolves automatically in a clear order: the project rate first, then the team member's rate, then your organisation default.
Step 3: Choose how the line items are grouped
This is where Hour Cap is deliberately more flexible than most tools. You pick one of four grouping modes, set per organisation:
- Per entry: one invoice line for every time entry. Maximum detail.
- Per project: one line per project, descriptions combined.
- Per date: one line per day worked.
- Per member: one line per team member.
Whichever mode you choose, the original descriptions are preserved. When entries are grouped, their descriptions are joined together so a single line still reads like a record of the work, not a vague "Consulting, 12 hours".
Step 4: Push to Xero as a draft
Create the invoice and Hour Cap queues it. The invoice is pushed to Xero as a draft, never authorised automatically. In Xero you can adjust wording, apply a branding theme, check the tax treatment, and then send it the way you always have. If the push fails for any reason, the invoice is marked failed with the stored error so you can retry rather than wonder what happened.
What happens after invoicing
Invoiced entries lock to that invoice, so the same hour can never be billed twice. Need to start over? Void the draft in Hour Cap and the entries are released to be invoiced again. It is a clean, auditable loop: track, group, draft, review, send.
Where this fits
Pushing time to Xero as a draft is the backbone of billing through your accounting system instead of around it. If you bill retainers, the same flow lets you invoice a retainer period directly. If you want to read more about the underlying connection, see how Hour Cap pushes time to Xero and how Xero tracking categories work on each line. To see the margin behind the hours before you bill, run the project profitability calculator.