Direct answer
Xero can send invoice reminders automatically. Set them up once, choose when each one goes before or after the due date, and write the wording yourself; Xero stops sending when the invoice is paid. That handles the routine. It stops at anything that depends on who the customer is, how big the invoice is, or whether there's a dispute, which is where call tasks, statements and a rule to pause work come in.
This guide covers setting up the reminders properly, the situations they don't handle, what to add for each one, and a chasing policy you can write in an afternoon.
Switching on Xero's reminders: timing, wording, which contacts
Xero's own invoicing pages (checked 24 October 2026) say reminders can go out before and after the due date, carry your own message, and stop "as soon as payment arrives". Xero also keeps a history of the reminders it has sent, which is useful when a customer says they never heard from you. The exact menu changes from time to time, so use Xero Central's current article for the clicks. The decisions below are the part that matters.
Timing. A common pattern is one friendly note a few days before the due date, one the day after it, and one a week or two later. Fewer is fine. A reminder before the due date catches the invoice that went to the wrong inbox, and it's the one customers mind least.
Wording. Write each reminder for the stage it goes at. The first one assumes the customer simply forgot. The last one should say what happens next: a phone call, a statement, or work pausing. Put the invoice number, the amount and how to pay in every one. If you've connected Stripe or GoCardless, Xero can put a "Pay now" button on the invoice, so the reminder becomes a link to pay rather than a request to find your bank details.
Which contacts. Decide which customers should not get automatic reminders at all: a large account you'd rather phone, a customer in an open dispute, a public body on agreed longer terms. Exclude those before you switch reminders on, then check the first week's sends by hand.
Your payment terms. Reminders only work if the due date on the invoice is the one you agreed. GOV.UK's guidance on late commercial payments says that where no date was agreed, payment is late 30 days after the customer receives the invoice or the goods or service, whichever is later.
Where Xero's reminders stop
Xero knows about the invoice. It doesn't know about the phone call, the dispute, the next job you've booked for that customer, or how much the customer matters to you. Each gap needs a rule, and most need a named person.
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| Situation | What Xero's reminders do | What to add |
|---|---|---|
| A large customer who should get a call, not an email | Send the same email as everyone else | A call task for a named person at a set day overdue, logged where the team can see it |
| The customer has raised a dispute | Keep sending unless you stop them | A dispute flag that pauses reminders and records the reason and who owns it |
| Payment was promised on a call for Friday | Keep sending | A promise date that pauses reminders until then, and a check on the day |
| The customer paid by bank transfer, not yet reconciled | Stop only once Xero records the payment | Reconcile before reminders go out, so a paying customer doesn't get chased |
| One customer has several overdue invoices | Remind about each invoice | A statement listing everything owed, sent by a person who decides when |
| The customer keeps booking new work while overdue | Nothing; Xero doesn't see your jobs | A check in your job or booking system that flags the account before work is confirmed |
| The debt is old enough to claim interest or compensation | Nothing extra | A rule for when you claim statutory interest or the fixed sum, and who approves it |
On that last row, GOV.UK sets statutory interest on late business-to-business payments at 8% plus the Bank of England base rate, unless your contract sets a different rate. You can also claim a fixed sum once per payment: £40 for debts up to £999.99, £70 up to £9,999.99, and £100 for £10,000 or more. Whether to claim it from a customer you want to keep is a business decision, not something to automate.
Credit control software, a bookkeeper or rules in your own flow
Once the gaps in the table cost you real time each week, there are three ways to fill them.
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| Option | What it adds | What it costs | Fits when |
|---|---|---|---|
| Xero's own reminders, set up well | Timed emails with your wording, stopped on payment | Included in your Xero plan | Most customers pay after a nudge and disputes are rare |
| Credit control software, such as Chaser | Multi-step chasing workflows, SMS reminders, a payment portal, reporting | Chaser's UK pricing starts at £179 a month on annual billing (£199 monthly) for businesses with turnover under £4 million; a "Care" add-on with a dedicated receivables specialist costs more (Chaser's pricing page, October 2026) | You chase enough invoices that a dedicated tool pays for itself |
| A bookkeeper or outsourced credit controller | A person who makes the calls and handles disputes | Usually hourly or a monthly retainer; ask for a written quote | The hard part is conversations, not reminders |
| Rules in your own flow | Chasing tied to your jobs and bookings: pause work, flag accounts, take a deposit before the next job | A build fee plus upkeep (see the cost guide) | The problem is that Xero can't see your jobs, and your job system can't see Xero |
These mix. A bookkeeper can work from a queue that software or your own rules build for them. The question to ask first is where the time goes now: writing emails, making calls, or finding out which customers are both overdue and booked in for next week.
Xero is also adding AI tools that touch chasing. In its 16 September 2026 announcement, Xero listed "overdue invoice chasing" among the workflows Claude for Small Business can prepare as a first draft for review. Xero's Google Gemini app, announced on 14 October 2026, can send a payment reminder, but asks the user to confirm any change to financial data first. Both keep a person on the final step, which is where it belongs.
A chasing policy you can write down in an afternoon
Copy this and fill in the blanks. A written policy is what lets someone other than you chase invoices, and what any tool or rule will follow later.
- Our standard payment terms are ___ days from the invoice date. Larger or public-sector customers on different terms: ___.
- Xero sends reminders at ___ days before the due date, and ___ and ___ days after it.
- At ___ days overdue, ___ (named person) phones the customer and logs the call.
- At ___ days overdue, we send a statement of everything the customer owes.
- If the customer raises a dispute, ___ owns it, reminders pause, and we aim to resolve it within ___ working days.
- If the customer promises a payment date, we record it and pause reminders until then.
- At ___ days overdue, or over £___ owed, new work for that customer waits until ___ approves it.
- We claim statutory interest or the fixed compensation sum when ___, and ___ approves it.
- Every month, ___ reviews the aged debtors report and the list of accounts on hold.
Keep it to one page. If a line keeps getting overridden, change the line rather than letting the exception become the rule.
When to stop work for a slow payer, and who decides
Stopping work is the strongest lever most owner-managed firms have, and it's often the one they never use, because nobody wants to make the call on a Friday afternoon. Write the rule down in advance: the number of days overdue, or the amount owed, at which new work waits. Then decide who can override it. Usually that's the owner, or whoever owns the customer relationship, with a short reason recorded.
The rule is simple enough for software. The decision isn't always. A customer 45 days late who has paid every invoice for six years is different from a new customer who has gone quiet. So the useful version is a flag, not a lock: the job or booking system shows that the account is over the limit, the person confirming the job sees it, and a named person decides. That check needs your job system and Xero to talk to each other, which is the kind of join Xero integrations: native app, Zapier, Make or custom covers.
Whatever you decide, tell the customer before it happens. The final reminder in Xero is the right place to say that work pauses at a given date, so nobody hears it for the first time when an engineer doesn't turn up.
Sources and dates
Checked 24 October 2026: Xero's UK and US invoicing pages (reminder timing, own message, stopping on payment, Pay now button); GOV.UK, "Late commercial payments: charging interest and debt recovery" (default 30-day rule, statutory interest, fixed compensation); Chaser's pricing page; Xero's blog post of 16 September 2026 on Claude for Small Business and ChatGPT; Xero's media release of 14 October 2026 on Google Gemini. We build the integrations and rules around chasing. Your accountant or solicitor confirms what you can claim from a customer.
