Editor | 21 May 2021
Use automatic invoice reminders to get paid faster with Xero

Use automatic invoice reminders to get paid faster with Xero

Waiting to get paid is one of the most frustrating things about running a small or medium-sized business.

A study by the Federation of Small Businesses (FSB) found that UK small businesses are owed an average of £6,142 - mostly by larger firms.

Sometimes, raising and chasing invoices can feel like a full-time job in itself, even if you’re using time-saving software like Xero.

If you’re struggling with late payments or you want to spend less time on the monthly financial admin, using automatic invoice reminders could help.

What is an invoice reminder?

Most of the time, getting an invoice paid is simply a case of delivering a gentler reminder into their right hands at the right time.

An invoice reminder is a gentle prod that you can send clients in order to follow up on an outstanding invoice.

Many business owners and finance managers will do this already when they notice that an invoice hasn’t been paid within the agreed time frame. You can give yourself an even better chance of getting paid promptly if you set up automatic invoice reminders.

Cloud accounting software packages including Xero and FreeAgent allow users to set up automatic invoice reminders. These systems will recognise when an invoice is late and send a personalised email to the right people, all without any input from you.

Xero invoice reminders

Xero can send automatic reminder emails to customers when a due date is approaching and when a due date has already passed.

When you switch on invoice reminders with Xero, the system has three default reminders that are sent out after 7, 14 and 21 days once an invoice is overdue.

With Xero reminders, you can:

  • Customise default reminder dates (both before and after your invoice due date)
  • Add up to five reminders
  • Personalise reminder emails
  • Turn reminder emails off and on
  • Stop reminders going out to certain customers
  • Check the history of when invoice reminders have been sent
  • Receive replies from customers

How to set up automatic invoice reminders with Xero

Setting up automatic invoice reminders is fairly intuitive with Xero, but it can take some practice to make sure you get it right. If you work with a Xero-accredited accountancy practice like CloudAccountant.co.uk, they’ll show you how to correctly set up reminders.

If you do not work with a cloud-based accountancy practice, you can find instructions on how to turn on invoice reminders on the Xero website.

For more information about Xero, speak to a member of our cloud accountancy team. Call: 0808 281 0303.