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Yes this is very important to my business also.

I have rental tenants with recurring invoices for the same amount each month but Xero always tries to match the newest invoice. This sometime leads to older invoices getting overlooked and becoming further overdue.

It is a manual process to monitor this each month when it could be so much easier.

It is common for us to invoice clients the same amount each month. Quite a few clients pay on a schedule that means they have received the next invoice when they pay the previous invoice. This missing option means that I can never trust the automatically matched invoice - I always have to manually match to see whether there is an older invoice that the payment should be assigned to. Otherwise we end up in a situation where a client who reliably pays their invoices has one old invoice that is severely and increasingly overdue, and it makes their statements look out of whack.
Reconciliation matching used to be one of my favourite features of Xero, but the lack of this tiny feature defeats the purpose and makes it a hindrance in many cases.

The lack of first in first out reconciliation has been our largest pain point with Xero. The fact that this has been an open issue for three years now is incredibly frustrating.

I find it amazing that after three years this is not implemented when it is absolutely mission critical to every customer so you don't send out embarrassing requests for payments for things that you don't need to. It's not about getting votes. It's about looking at this from a common sense point of view. Which one of these would benefit the most customers? Most customers do not come in here and vote!

I agree with the below comment:

So embarrassing having clients chased for 'overdue' invoices when it is actually at our end with payments being allocated to the most recent invoice, not the oldest one.

This happens often.

It makes obvious sense that when you match a payment, you match it with the client's oldest invoice, not their latest invoice when they have the same value. This creates all sorts of problems with the current system, as it matches on the latest invoice, which then means you send out payment requests for the older invoice. I've had to turn off automatic bank reconciliation because of this feature, as it is very embarrassing.

So embarrassing having clients chased for 'overdue' invoices when it is actually at our end with payments being allocated to the most recent invoice, not the oldest one.

I have about 100 clients who have a repeating invoice for the same amount each month. however some pay regularly in the month it is due and others pay regularly in the following month and then Xero attempts to allocate to that current month, instead of the previous month, which is the one it is really paying. . so its impossible to auto allocate in the bank feed and I have to manually open each one, which is very time consuming and frustrating.
Can Xero pls introduce oldest items first automatic allocation. One could always manually override that and pay a more recent one if required for any reason.

This could be such a great feature, but why on earth have they coded this to the latest invoice is beyond me.

when allocating payments to invoices, would be helpful if xero selected the oldest invoice at that value rather than the most recent invoice raised for that client. We have a number of clients that have monthly invoices for same value (subscription/services etc) and Xero always suggests the most recent which isnt helpful.

It is obvious that it should match the oldest invoice first but both manual and AI automated it matches the newest first. This is BAD as XERO then send out overdue letters for the older unpaid invoice. Looks very unprofessional. Logged support case CX0017792280 with screen shots.

Even when invoices are of the same value, Xero is allocating to the most recent invoice - this is critical

SAGE has the facility to apply credits received to the earliest sales invoice and will auto-fill till there is a balance remaining.
Xero needs to have the same facility
I have a client where they receive 1 payment to c. 4,000 invoices each month so haven't to go through each page and select all but limited to 100 at a time.

During bank reconciliations where there are transactions with "other possible match found", the payment is matched to the invoice with the closest due date, which is not always the oldest invoice. It would be ideal if we were able to configure transactions to match to the oldest invoices first.
We have several customers who receive recurring monthly invoices and in almost all cases, they would be paying the most outstanding invoice.

Agreed, such a stupid method to allocate it to the newest one first, why wouldn't you be clearing older invoices first?

Why is Xero's suggestion for monies received not the oldest customer invoice.

If I have a customer that I have raised two invoices for, for the same amount. Why does Xero not 'suggest' the oldest invoice in the reconciliation screen?

I'm getting sick of chasing customers only to find out they paid and we've reconciled against a newer invoice. Same for supplier invoices too.

This is huge, and critical for us, it is SUCH a huge waste of time by only showing latest invoice, causes major issues, please this should be an easy setting