How to Set Up Xero Invoice Reminders Properly (and Where They Stop)

If you're on Xero, you already have automatic invoice reminders. They're included in your subscription, and they take about ten minutes to set up properly. It's also easy to switch them on and leave the default emails exactly as Xero wrote them, which wastes most of their value.

Start here before paying for any reminder tool — including mine. This guide covers how to turn Xero's reminders on, a schedule that works within the five you're allowed, how to rewrite the default emails, and the points where they stop being enough. All the Xero steps below come from Xero's own help articles, Set up and add invoice reminders and How invoice reminders work.

Before you start

• Every customer needs a current email address in their Xero contact. Reminders go to the contact's primary person, plus anyone with Include in emails ticked on the contact record — so this is a good moment to make sure accounts payable is included, not just your site contact.
• Invoices must be marked as sent. Xero only sends reminders for invoices marked as sent.
• You need the administrator or standard user role.
• Decide where replies should go. Customer replies go to the login email of the person who first turns reminders on. If that's your personal address, change it to the inbox you actually watch for accounts.

Turn reminders on

1. In the Sales menu, select Invoices.
2. Click Invoice Reminders: Off.
3. Tick Email customers when an invoice is. Xero's three default reminders are now active for overdue invoices.
4. Optionally, tick Include button to online invoice and detail summary — this adds the online invoice link, amount due, due date and invoice number to the top of every reminder. I'd turn this on: the easier it is to see what's owed and pay it, the sooner you get paid.
5. Optionally, tick Include a link to the invoice PDF.
6. Optionally, tick Don't send reminders for amounts owing on an invoice under and enter an amount — useful if you don't want to send a reminder over a few dollars of rounding.
7. Click Save.

The PDF link and minimum-amount settings apply to all your reminders, not one at a time.

Build a schedule within five reminders

Xero gives you three default reminders and lets you have up to five in total. Each one is set to go out a number of days before the due date ("due in") or after it ("overdue by"). Setting the days to 0 sends it on the due date.

Five is enough for a sensible schedule. This is the one I'd use:

Reminder	Xero setting	Purpose
1	Due in 2 days	Friendly heads-up so it's on their radar
2	Overdue by 2 days	Catch the ones that slipped through
3	Overdue by 7 days	Ask for a payment date
4	Overdue by 14 days	Firmer — and your cue to pick up the phone
5	Overdue by 30 days	Final notice, with a deadline

To add one: from the same Invoice Reminders screen, click Add reminder, choose due in or overdue by under Send if an invoice is, enter the number of days, and save. You can edit or delete the three defaults the same way.

Xero sends emails; it can't make the day-14 phone call for you. Put that one in your calendar. (Here's a full follow-up schedule with a phone script.)

Rewrite the default emails

This is the step most people skip, and it's the one that matters most. Each reminder has its own email template, so you can — and should — make the tone shift from a friendly heads-up to a clear final notice. Use Insert placeholder in the template editor to drop in the customer's name, the invoice number, the amount and the due date.

A few rules that make reminder emails work:

• Lead with the facts: invoice number, amount, due date, how to pay. Put them in the first two lines.
• Make each one easy to answer. "Let me know if there's a problem with the invoice" surfaces disputes early, while they're still small.
• Sign it from a person, not "Accounts Department". People ignore departments.
• Don't apologise for following up, and don't threaten anything you won't do.

For the 7-day reminder, something like this works (the bracketed bits are placeholders):

Hi [first name], I'm following up on invoice [number] for [amount], which was due on [due date]. Could you let me know when it will be paid? If there's a problem with the invoice, just reply and I'll sort it out. Thanks, [your name]

Stop reminders when you need to

Xero lets you stop reminders for particular customers or for specific invoices — Xero's own examples are an invoice that's been partly paid, or one you've already spoken to the customer about. Use this every time a customer raises a problem or agrees a payment plan: nothing damages a relationship faster than an automated "your invoice is overdue" arriving while you're in the middle of sorting it out.

You can also check the status and history of each invoice's reminders to see whether they've been sent.

Where Xero's reminders stop

Set up like this, Xero's reminders are a real improvement on nothing. But it helps to know their limits before you rely on them:

• Everyone gets the same wording. Each reminder has one template, so a client of ten years who's two days late gets the same email as a chronic late payer.
• They don't react to replies. Replies land in one inbox. Xero's help doesn't describe any way for reminders to respond to what a customer says — if someone disputes an invoice or promises to pay on Friday, the next reminder still goes unless you stop it yourself.
• One schedule for every customer. The same five timings apply to everyone, and the PDF and minimum-amount settings are organisation-wide.
• Email only. No texts, and no prompt to call.
• They send without asking. Once reminders are on, they go out automatically. For many businesses that's exactly the point; if you'd rather approve each one, they won't do that.

Xero itself points to the Xero App Store for "more advanced invoice reminder options".

When an app is worth it

If you send a handful of invoices a month to customers who mostly pay, Xero's reminders, set up properly, may be all you need. An app starts to earn its cost when you're spending real time on follow-ups, when disputes and promises keep getting buried, or when you want different customers handled differently.

That's why I built Unpaid. It connects to Xero, drafts a reminder for each overdue invoice that fits the customer and how late it is, reads replies — pausing reminders when a customer disputes an invoice or asks a question — and waits for your approval before anything sends. If Xero's own reminders are still switched on when you connect, Unpaid warns you, so customers don't get two sets. There's a side-by-side comparison with Xero's built-in reminders and a comparison of the main reminder tools if you want to weigh them up.