GuideFeb 12, 2026
How to automate invoice reminders in Xero (2026 guide)
Step-by-step guide to setting up Xero's built-in reminders — and how to go beyond its limits with SMS, smart scheduling, and auto-stop.
Read articleXero is brilliant for accounting: invoicing, bank reconciliation, payroll. But when it comes to actually chasing overdue invoices? The built-in tools are surprisingly basic.
Three reminder stages. Email only. The same template for every client. No visibility into what's working. If you've been wrestling with Xero's overdue invoice handling, this guide walks you through the step-by-step process, and shows you how to go beyond the defaults.
“They tried Xero’s automated reminders to cut down the workload. It helped a bit, but they quickly hit limitations: only 5 reminder slots, and the same template applied to every client.”
– Reddit user on r/Xero
“Xero’s reminder stages are limited to 5. Does anybody else wish it could support more stages and more automation rules?”
– Reddit user on r/Xero
Get AI Summary
Before diving into what's missing, let's acknowledge what Xero does give you. These are useful starting points, especially if you're only managing a handful of invoices.
Xero's Aged Receivables report groups unpaid invoices by how far overdue they are: current, 1-30 days, 31-60 days, 61-90 days, and 90+ days. It's the go-to report for spotting overdue invoices at a glance.
You can set up 3 automatic email reminders at configurable intervals (e.g. 7, 14, and 21 days overdue). Xero sends these automatically once enabled. You can stretch to 5 total with manual additions.
Every invoice in Xero has a clear status: Draft, Awaiting Approval, Awaiting Payment, Overdue, or Paid. You can filter and sort by status to quickly see which invoices need attention.
These features work fine for small operations. But once you're sending more than a dozen invoices per month, or dealing with clients who routinely pay late, the cracks start to show.
Xero was built as an accounting tool, not a collections tool. Here's where its overdue invoice handling hits a wall, and why thousands of businesses look for something better.
Xero's reminders are email-only. With email open rates averaging around 20%, most of your overdue notices are never even seen. SMS has a 98% open rate and gets read within 3 minutes on average. Xero offers no way to tap into this channel.
Research shows slow-paying clients often need 7-8+ touchpoints before they pay. Xero caps you at 3 automatic reminders (5 total with manual additions). After that, you're back to writing emails by hand.
A reliable enterprise client who's 2 days late shouldn't get the same message as a chronic late-payer who's 60 days overdue. But in Xero, they do. There's no per-client customization of reminder tone, timing, or frequency.
Effective collections follow an escalation pattern: friendly nudge, then firm reminder, then final notice, then next steps. Xero has no concept of escalation. Each stage is independent with no automatic progression in tone or urgency.
Which reminder stage triggers the most payments? Which clients respond to the first email vs. needing five? Xero gives you zero visibility into reminder performance. You're guessing at what works.
If these limitations sound familiar, you're not alone. See our deep-dive on why Xero invoice reminders aren't working for more detail on each of these gaps.
Whether you stick with Xero's built-in tools or add a dedicated reminder tool later, here's the process for managing overdue invoices in Xero effectively.
Go to Accounting > Reports > Aged Receivables. This is your starting point for overdue invoice management. Sort by the oldest overdue invoices first and note which clients appear in the 60+ and 90+ day columns. These are your highest-priority follow-ups. Export the report to track progress over time.
For each overdue invoice, click into the invoice detail to check its history. Has the client viewed the invoice? Were any reminders sent? Is the invoice status correct (it should be "Sent" or "Awaiting Payment," not "Draft")? This context helps you decide what action to take next.
For your largest overdue invoices, don't rely on automatic reminders alone. Write a personalized email or, even better, pick up the phone. Reference the specific invoice number, amount, and due date. For email templates that actually get responses, see our overdue invoice email templates guide.
Go to Settings > Invoice Reminders and enable automatic reminders for everything else. Set your 3 stages at sensible intervals (e.g. 3 days, 7 days, and 14 days overdue). Customize the email subject and body for each stage. Remember: this is email-only and the same template goes to every client.
For invoices that have been overdue for 60+ days, consider whether a credit note, discount, or payment plan is appropriate. In Xero, you can create a credit note against the invoice or set up a repeating invoice for installment payments. Sometimes getting 80% is better than chasing 100% forever.
Need help writing those manual reminders? Our overdue invoice email templates give you copy-paste messages for every stage of the overdue timeline, from friendly nudge to final notice.
The step-by-step process above works, but it's manual, time-consuming, and limited by Xero's built-in capabilities. ChaseBot plugs directly into Xero and automates the entire overdue invoice workflow with features Xero doesn't offer.
Set as many reminder stages as you need: 3, 8, 12, whatever it takes. Send each one via email, SMS, or both. SMS has a 98% open rate compared to 20% for email, which means your overdue notices actually get read.
Give your best clients a gentle 2-stage email nudge. Give chronic late-payers an aggressive 8-stage sequence with SMS at every step. Set different rules, timing, and tone for each client based on their payment history.
ChaseBot syncs with Xero in real-time. When a client pays (full or partial), reminders stop or adjust automatically. No more embarrassing follow-ups after a client has already paid. No manual toggling required.
Build workflows that automatically escalate in tone: friendly reminder at day 3, firm notice at day 14, final warning at day 30, and an internal alert to your team at day 45. Xero has no concept of escalation. ChaseBot was built for it.
Want to see the full comparison? Check out our guide to automating invoice reminders in Xero, learn more about ChaseBot's Xero invoice reminders, or explore our full invoice reminder software feature set.
You don't need to replace Xero. Keep it for invoicing, accounting, and bank reconciliation. Add ChaseBot for the overdue invoice workflow. Here's what the combined system looks like.
ChaseBot detects the overdue status in real-time via the Xero API. No manual check required. The moment an invoice passes its due date, the workflow begins.
A polite email reminder goes out automatically. "Hi [Name], just a quick reminder that invoice #1234 for $5,000 was due on [date]. Here's a link to pay." Friendly, professional, zero effort on your part.
If unpaid, a second reminder goes out, this time adding SMS. The SMS lands directly on their phone with a 98% open rate. The email serves as a backup with full invoice details and payment link.
The tone escalates automatically. "This is a second notice regarding overdue invoice #1234. Please arrange payment at your earliest convenience to avoid further follow-up." Still professional, but clearly more urgent.
A final notice goes to the client with clear next steps. Simultaneously, an internal alert goes to your team or account manager so they can decide whether to call, apply late fees, or adjust the approach.
The moment a payment (full or partial) hits Xero, ChaseBot detects it and stops or adjusts reminders instantly. Partial payments update the outstanding amount in future reminders. No manual intervention needed.
This workflow handles everything from the first gentle nudge to the final notice, without you lifting a finger. For clients who still don't pay after the full sequence, see our action plan for clients not paying invoices.
Connect your Xero account in 30 seconds. Get unlimited SMS + email reminder stages, per-client rules, auto-escalation, and real-time payment sync, so overdue invoices get paid without the busywork.
Try ChaseBot freeStep-by-step guide to setting up Xero's built-in reminders — and how to go beyond its limits with SMS, smart scheduling, and auto-stop.
Read articleLearn how to automate your AR process. Reduce DSO, eliminate manual follow-ups, and get paid faster. Step-by-step for small businesses.
Read articleCopy-paste late fee clauses for your invoices and contracts. Percentage-based, flat fee, payment terms, and early discount wording.
Read article