Get Set Up Right: A Practical Guide to Configuring Connectorly for Microsoft Dynamics 365 and Xero
Integrating Microsoft Dynamics 365 Sales with Xero can streamline your invoicing, simplify reconciliation, and give your teams instant access to accurate financial data—all without manual workarounds. But to make that happen smoothly, proper configuration is key. This guide walks you through setting up Connectorly step by step, so your data flows exactly where and how you need it. Whether you’re syncing invoices, contacts, or payment details, we’ll help you get it right the first time—with clarity, control, and confidence.
Accessing Connectorly Settings in Dynamics 365
To begin configuring Connectorly, navigate to the Connectorly tile within your Dynamics 365 environment. This tile leads you directly to the Connectorly Settings entity, housing your integration configurations. Each connection to a Xero organisation has its dedicated settings record. Simply double-click the appropriate record to access and modify its settings.
Key Configuration Options and Their Implications
To effectively leverage Connectorly’s capabilities, it’s essential to understand each configuration option clearly:
Is this the Default Connection: Setting this to ‘Yes’ assigns this specific Connectorly as the default for new invoices, automatically linking invoices upon creation.
Use Xero Invoice Number: In Dynamics 365, the invoice number is generated automatically and cannot be edited. If this option is set to No, Connectorly sends the Dynamics-generated invoice number to Xero. If set to Yes, Xero generates the invoice number instead, and Connectorly will sync that Xero invoice number back into the corresponding Xero Details record.
Use Invoice Name: This option is available only when Use Xero Invoice Number is set to No. If it is set to Yes, the connector uses the Invoice Name as the Invoice Number in Xero. If it is set to No, the Dynamics Invoice ID will be used instead as the Invoice Number in Xero.
Invoice number in Dynamics 365
Xero details record
Create New Contacts in Xero:
When set to Yes, Connectorly will create new contacts in Xero from Dynamics 365 during the invoice sync process. If set to No, only invoices linked to existing Xero contacts will be synced. If Connectorly attempts to sync an invoice for a contact that doesn’t exist in Xero, a Sync History record will be generated for that invoice in Dynamics 365. In such cases, the user must first create the contact in Xero and then resend the invoice.
Use Account/Contact Number for Mapping:
This setting determines how contacts are matched between Dynamics 365 and Xero. By default, Connectorly matches Dynamics 365 accounts and contacts to Xero contacts based on their names. When this option is enabled, Connectorly will instead use the Account Number and Contact Number from Dynamics 365 to match the customer with the corresponding contact in Xero.
Allow Contact Update in Xero: Enabling this allows contact updates made in Dynamics 365 to reflect in Xero, keeping your data consistently up-to-date. Xero contacts will be updated when a new transaction is synced from Dynamics 365 to Xero.
Allow Invoice Update in Xero: This feature lets Connectorly update existing Xero invoices when Dynamics 365 invoices change. Updates to paid invoices are restricted to specific fields due to Xero’s policies.
Create New Products in Xero: This setting controls whether new products from Dynamics 365 become inventory items in Xero. Disabling this option prevents new product creation but allows invoice synchronisation.
Default Xero Invoice Status: Determines the initial status of synced invoices in Xero—Draft, Submitted, or Authorised. This influences editability and approval workflows in Xero.
Default Xero Sales Account Code: This account code is applied to invoice lines when no specific code is provided (can be set for each line item). If a product in Xero doesn’t have a Tax Rate defined, the Tax Rate specified here will also be used.
Default Xero Purchase Account Code: This code is used for bill lines when no specific account code is provided (can be set for each line item). If the product in Xero doesn’t have a defined Tax Rate, the Tax Rate set here will be applied instead.
Default Xero Branding Theme: When enabled, this option automatically assigns the selected Branding Theme to new invoices. However, the theme can still be modified manually on each invoice if needed.
Set Date Delivered Automatically: When set to Yes, Connectorly automatically populates the Date Delivered field with the current date when a new invoice is created.
Connectorly uses the Date Delivered field to determine whether an invoice should be synced to Xero. If the date is today or earlier, the invoice will be synced immediately. If the date is in the future, Connectorly will delay syncing until that date.
Create Credit Note Automatically: When enabled, Connectorly will automatically generate and sync a credit note to Xero when an invoice is cancelled.
If the invoice is in DRAFT or SUBMITTED status in Xero, it will simply be deleted when cancelled in Dynamics 365.
If the invoice is APPROVED in Xero, a credit note for the full amount will be created in Xero and applied to the invoice.
If the invoice is PAID, Connectorly will log a Sync History message stating: “The invoice is fully paid in Xero.”
If the invoice is PART PAID, a credit note for the full invoice amount will be created in Xero but not applied. Manual action will be required to apply it.
If this setting is disabled, Dynamics 365’s standard cancellation process will be used, and credit notes must be created manually.
Bundled Product Header Only: When set to Yes, Connectorly will sync only the main Product Bundle line—with its total price—to Xero and ignore all associated child invoice lines in Microsoft Dynamics 365.
If set to No, Connectorly will send all invoice lines from Dynamics 365 to Xero. The Product Bundle will appear in Xero with its quantity and price, while the child products will be included as description-only lines.
Send Email from Xero: When set to Yes, Connectorly will trigger Xero to email the invoice directly to the customer.
Please note, this will only occur if the Default Xero Invoice Status is set to Authorised.
Sort Invoice Lines by Description in Xero: When enabled, Connectorly will sort invoice lines alphabetically by their description before sending them to Xero. If disabled, the original order of the invoice lines from Dynamics 365 will be preserved during the sync.
Do Not Use Invoice Description as Xero Reference: When set to Yes, Connectorly will not use the Invoice Description field as the Reference in Xero. If set to No, Connectorly will populate the Xero Reference field with the content from the Invoice Description.
By default, Connectorly sends the first 255 characters of the invoice description to the Xero Reference field. This is a useful way to include PO numbers or any other important reference information on your Xero invoices.
Conclusion: Reliable and Tailored Integration
Configuring Connectorly effectively bridges Dynamics 365 Sales and Xero, facilitating precise, real-time financial visibility. Understanding configuration options, meticulous testing, and proactive monitoring collectively ensure a robust integration tailored specifically to your organisation’s unique requirements.
Explore our comprehensive Connectorly Help Centre for additional support and guidance.
