What is an essential component of a project management process in Xero before billing clients?

Monitoring actual vs. estimated costs is a crucial component of the project management process in Xero before billing clients because it helps ensure that the project remains within budget and is financially viable. By comparing the actual expenses incurred with the estimated costs projected at the outset, project managers can identify any discrepancies or cost overruns. This analysis not only aids in financial planning but also ensures transparency with clients regarding the project's progress and potential changes in billing.

Understanding this aspect of project management allows for informed decision-making and helps maintain a positive client relationship, fostering trust and accountability in the services provided. The other options, while they may play roles in overall project management, do not directly contribute to ensuring that the billing process reflects the actual work and costs incurred.