Which system should send invoice reminders?
Send reminders from the system that holds the invoice and knows when it has been paid. If your job software passes invoices to Xero or MYOB and payments are matched there, the accounting software is usually the right sender. If reminders come from a system that cannot see payments, customers who have already paid will be chased, and those calls cost more time than the reminders save. Xero only sends reminders for invoices marked as sent, and each customer needs a current email address in their contact record. Customer replies go to the login email of the person who first turned reminders on, so change that address if nobody checks it.
What reminder schedule suits trade invoices?
Match the schedule to your payment terms. Xero lets you create up to five reminders, each set to go a number of days before or after the due date, and a setting of zero days sends on the due date itself. It starts with three default reminders for overdue invoices, which you can edit. The schedule below is a hypothetical example for 14-day terms on residential jobs. Adjust the gaps for builders and commercial clients on 30-day terms, and count every contact if you also send texts or phone.
- 3 days before the due date: a short note with the amount, due date and payment options.
- On the due date: the same details, worded as a reminder.
- 7 days overdue: a firmer note asking the customer to pay, or to reply if something is wrong with the job.
- 21 days overdue: a final automatic notice saying someone from the business will call.
What should an invoice reminder say?
Each reminder should let the customer pay without phoning you. Include the invoice number, the job address or reference, the amount owing, the due date, how to pay and who to contact if there is a problem with the work. Xero can add a link to the online invoice and a PDF copy to every reminder. Keep the tone factual. Leave out promotions, because the ACMA lists bills and invoices that also carry promotional content as a common way businesses breach the spam rules. Avoid statements about consequences you have not decided on: the ACCC and ASIC debt collection guideline warns against misleading representations when collecting a debt.
How often can you contact a customer about an overdue bill?
The ACCC and ASIC debt collection guideline applies to businesses collecting their own debts as well as to collection agencies. It recommends no more than three contacts a week, or 10 a month, where contact is actually made, and it counts letters, emails and texts as well as calls. For phone contact it suggests 7:30 am to 9 pm on weekdays and 9 am to 9 pm on weekends, in the customer's local time, with no contact on national public holidays. An automatic schedule of four emails over three weeks sits inside those limits. The risk comes from stacking automatic emails, texts and your own calls in the same week.
When should automatic reminders stop?
Reminders should stop as soon as the matter needs a person. Xero lets you turn reminders on or off for the whole organisation, for one customer or for specific invoices, so you can pause a single job without stopping the rest. Agree who in the business makes that change and how quickly, and set the rule before the first dispute arrives. A reminder that lands after a customer has raised a problem tells them nobody read their message. Pause reminders in any of these cases:
- The customer disputes the work or the amount.
- A payment plan has been agreed.
- The invoice is part-paid and the balance depends on a variation still being settled.
- The customer has told you about hardship or illness.
- The matter has gone to an adviser or a collection agency.
What happens after the last automatic reminder?
A person should phone the customer. Before calling, have the signed quote, any variations, completion photos and the invoice history open, so the conversation is about facts. Consumer Affairs Victoria tells tradespeople to make sure customers know, before the job starts, how late payments will be handled and how any late payment fees will be calculated, so those terms belong on the quote. If the call does not settle it, the next steps are a payment plan, a formal letter or a referral to a lawyer or collection service. This page is administrative guidance only; get advice from a lawyer or your industry association before taking formal recovery action.