Stop chasing invoices by hand: automating reminders and direct debit in Xero

Chasing invoices is the job almost no one enjoys. It is easy to put off, easy to forget, and every day it slips is another day your money sits in someone else's account. The good news is that most of it can be automated, so the follow-up happens whether or not you get to it.

Here is how to set your invoicing up so it does the chasing for you.

What manual chasing really costs

When reminders depend on you remembering, they get skipped. You are busy, the awkwardness of nudging a good customer puts you off, and the invoice quietly ages. By the time you notice, it is well overdue and harder to collect.

Automating the follow-up removes both the delay and the discomfort. The reminders go out on time, every time, in a polite and consistent tone, and you are freed from having to think about it at all.

1. Turn on automated invoice reminders

Xero can send reminders for you, both before an invoice is due and after. You set the schedule once and it runs on every invoice you send.

A gentle nudge a few days before the due date often prevents an invoice going overdue at all. A follow-up on the due date and again a week later catches the ones that slip. Most customers who were simply going to forget will pay on the first or second reminder, without you sending a single email yourself. This week's newsletter has the exact steps to switch it on.

2. Make it easy to pay on the spot

A reminder works far better when paying takes one click. Add an online payment option to your invoices so customers can pay by card or direct debit the moment they open the email, rather than logging into their banking, copying your details, and setting up a payment.

Every bit of friction you remove is a reason for the invoice to be paid sooner. The easier you make it, the faster the money arrives.

3. Set up direct debit with GoCardless

Direct debit takes it a step further. Instead of waiting for the customer to act, the payment comes to you automatically on the due date once they have authorised it.

You can connect GoCardless to Xero as a payment service, then invite customers to set up a direct debit authorisation. After that, invoices can be collected automatically when they fall due. It is ideal for regular or repeat customers, retainers, and any arrangement where the same people pay you again and again. You stop chasing entirely, because there is nothing to chase.

4. Put it together for a near hands-off system

The real power comes from combining these. Automated reminders handle the one-off invoices and the occasional late payer. Direct debit handles your regular customers so those payments arrive without anyone lifting a finger. Online payment covers everyone in between.

Set up together, your accounts receivable largely runs itself. You spend a few minutes a week glancing at what is outstanding rather than hours drafting reminder emails and following up by phone.

Keep it friendly

Automating your follow-up does not make it cold. Xero lets you edit the wording of every reminder, so the tone stays like you: warm, clear and professional. Customers rarely mind a well-worded reminder. Most are grateful for the nudge.

Where to start this week

Start with automated reminders, because it takes about ten minutes and works on its own from then on. Once that is running, add an online payment option, then look at direct debit for your regular customers.

Chasing invoices by hand is a tax on your time that you do not need to keep paying. Let the software do the routine follow-up, and keep your energy for the work only you can do.

If you would like a hand setting any of this up, or working out which approach fits your customers, we would love to help.