Final answer:
Xero can automatically apply the payment to the invoice if you have a connected bank feed.
Step-by-step explanation:
When a customer pays their invoice, Xero can automatically apply the payment to the invoice if you have a connected bank feed. This means that the payment will be matched with the corresponding invoice and marked as paid.
For example, if a customer pays a $100 invoice, Xero will detect the payment in your connected bank feed and apply it to the invoice, updating the status to 'Paid'.
This automation feature saves time and ensures accurate record-keeping, reducing the need to manually reconcile payments.