Turn on automatic invoice reminders in Xero

A 6-minute read · for anyone invoicing through Xero

If you're on Xero and manually nudging late payers, you're doing a job Xero will do for free. The feature is called invoice reminders, and once it's on it runs quietly in the background until you turn it off.

Why it's worth ten minutes

Most small businesses carry a few thousand dollars in invoices that are simply late, not disputed. Nobody's refusing to pay; the reminder just never went out because the person who'd send it was on the tools. Automatic reminders close that gap. They're consistent, they're not awkward the way a personal chase can feel, and they go out whether or not you remembered.

The setup, step by step

Menus move as Xero updates, so treat these as the shape of it rather than exact clicks. If a label isn't where you expect, search "invoice reminders" in Xero Central.

1. Open invoice reminders. In the Business or Sales area, find your invoice settings, then the Invoice Reminders section. There's a single switch to turn the whole feature on.
2. Set the schedule. Xero lets you send reminders a set number of days after an invoice is due - and, if you like, one before. A sensible starting pattern for NZ trade terms is a gentle nudge at 7 days overdue, a firmer one at 14, and a final one at 30.
3. Set a minimum amount. There's usually an option to skip reminders for invoices under a small dollar figure, so a $20 balance doesn't trigger a chase. Set it to whatever's not worth the email.
4. Word the messages like you'd speak. Edit the default text so it sounds like your business, not a debt collector. "Hi {first name}, just a reminder that invoice {number} was due on {date} - here's the link to pay. Any problems, reply and let me know." Keep the pay link in.
5. Turn it on for the right invoices. Reminders apply to invoices you send from now on; there's also a per-invoice toggle so you can exclude a specific customer you'd rather handle by hand.

Getting the tone right

The mistake is making reminders sound automated and cold. Three things keep them warm:

• Use the customer's first name and the invoice number, both of which Xero fills in for you.
• Lead with the reminder, not the threat. Escalate the wording only on the later reminders.
• Always invite a reply. Half the time a late invoice means the customer has a question, not a refusal.

Rule of thumb: if you'd be comfortable reading the reminder aloud to that customer, it's worded right.

What about disputes and part-payments?

A common worry is that a reminder will go to someone who's already paid or who's mid-conversation with you about the bill. Two things cover that. First, Xero stops reminding an invoice the moment it's marked paid, so a customer who's settled up won't get chased. Second, the per-invoice toggle lets you switch reminders off for any invoice you'd rather handle by hand - the disputed one, the client on a payment plan, the mate you'll ring yourself. Set those aside and let the automation handle the ordinary majority.

Add a way to pay in one tap

Reminders work far harder when there's a pay-now button in the email. If you've connected a payment service to Xero - Stripe, or a bank/card option - every reminder can carry a link that lets the customer pay on the spot, from their phone, without digging out your bank details. The easiest invoice to collect is the one someone can pay in ten seconds while they're looking at the reminder. It's the single change that most shortens the gap between "reminder sent" and "money in".

What to skip

You don't need a separate debt-chasing app to start - Xero's built-in reminders cover most of it, and you've already paid for them. Add-on tools earn their keep only when you're carrying a lot of overdue accounts and want call scripts, SMS, and payment plans. For most small businesses that's a later problem, if ever.

Once it's running

Give it a fortnight, then check how many invoices got paid off the back of a reminder versus a call from you. Almost always, the reminders are quietly doing the work - which frees up the hour a week you were spending on it, and pulls your average payment time in. If your terms are 20th-of-the-month rather than a fixed number of days, adjust the schedule to match; the principle is the same, the timing just follows your terms. Once it's humming, the same idea works for chasing missing paperwork, not just money - it's how a lot of practices run their year-end record requests.

Written by the Even Odds team · Practical AI for Kiwi business · Last updated 18 July 2026