You switched Xero's invoice reminders on years ago. Most businesses did. And still, about 48% of invoices issued by Australian small businesses in 2021 were paid late, costing around $1.1 billion a year (Xero). The reminders are running. The money is still late. That gap is worth understanding, because the problem is not that you forgot a setting. The problem is that every reminder in the country sounds exactly the same, and your clients stopped reading them a long time ago.
Your clients can smell an automated reminder
Picture your client's inbox on a Tuesday. Three of their suppliers use Xero. All three reminders arrive from Xero's sending address, not the supplier's own. All three use wording within a whisker of the default template. All three are ignorable in under a second, because an automated email asking for money carries no social weight at all. Nobody feels awkward ignoring software.
That is the real reason reminders underperform: not the software, the sameness. A reminder that reads like a person gets treated like a person. A reminder that reads like a system gets filed with the newsletters.
The six places Xero's reminders quietly stop working
These come straight from Xero's own community and product request forums, where owners have been asking for fixes for years. If your reminders are on and the money is still slow, check this list before you blame your clients.
- The five email cliff. Xero sends a maximum of five reminders per invoice, then goes silent forever. The invoices that matter most, the ones at 60 and 90 days, are exactly the ones Xero has stopped chasing.
- It reminds the wrong people. Reminders go to every contact with "include in emails" ticked, not to the person who actually received the invoice. Owners report chasers landing with directors, branch offices and colleagues who have never seen the bill.
- It only chases invoices sent through Xero. Created the invoice in Xero but emailed the PDF yourself? Xero may never treat it as sent, and it will sit outside the reminder run without telling you.
- One email per invoice. A client with four overdue invoices gets four separate chasers, sometimes on the same morning. That reads as spam to a human and to a spam filter alike.
- Every client gets identical treatment. Your best account of 8 years and a first-time customer who owes $180 receive the same words on the same schedule. Which is precisely how good relationships get burnt by software.
- You cannot see if anyone read it. Xero will not tell you whether a reminder was delivered or opened. Silence might mean they are ignoring you, or that every chaser has gone to junk since March.
The wording tricks with actual numbers behind them
There is real research on what gets invoices paid, and almost nobody in Australia is using it.
- Say thank you on the invoice itself. FreshBooks analysed roughly 250,000 invoices and found ones that included "thank you" in the terms were paid at a rate of nearly 90%.
- Ask for 7 days, not 30. In the same data, invoices with 7 day terms were paid inside a week 58% of the time. Net 30 does not mean "paid in 30", it means "put me at the bottom of the pile".
- Invoice the same day as the work. A QuickBooks study found invoices sent within 24 hours of finishing the job were paid about 1.7 times faster than invoices sent a week later. The value is fresh, so the bill feels fair.
- Do not expect big companies to save you. Australia's Payment Times Reporting Regulator found only 66.7% of invoices from big businesses to small suppliers were paid on time in the first half of 2025. If your biggest client is slow, that is not you. It is a national habit, and it is why your terms and your follow-up have to do the work. The figures for the current reporting cycle are in the current payment times data for Australia.
Make the automation sound like you
The single highest-value change costs nothing: rewrite Xero's reminder templates so they sound like a person, because Xero will happily send your words instead of its own. The test is simple. Read the reminder aloud. If you cannot hear yourself saying it across a counter, rewrite it.
Xero's out of the box flavour: "Just a reminder that invoice INV-0042 is now overdue. Please make payment at your earliest convenience."
The same message, sounding like an actual tradesperson: "Hi Sam, the invoice for the deck job (INV-0042, $3,400) went past due on Friday. If it's already on the way, ignore me. If it's buried, the payment details are attached. Cheers, Dave."
Same information. One is wallpaper, one is Dave. People pay Dave.
Two rules while you rewrite: never apologise for asking, and put one specific detail of the actual job in the wording where it fits, because specificity is what proves a human is watching. Then respect the cliff: when the five automated emails run out, the next step is a phone call, not a sixth email. A debt that survives five written nudges has a reason, and you want to hear it.
Where the free version tops out
Everything above is free, built into the Xero subscription you already pay for, and worth doing this week. What it cannot do is judgement. Xero cannot give your key account a gentler run than a stranger, cannot bundle four overdue invoices into one civilised email, cannot keep chasing past the fifth email, and cannot tell you each morning what is overdue, what got paid overnight and what is drafted waiting for your say so. That judgement layer is Cai, the AI system behind every Coastworks build, working through our Accounts element on the Engine: a read-only link to your Xero, so it sees every invoice and payment but cannot touch your books, with every reminder drafted for your approval and the whole picture in your morning report. We built it on our own Sunshine Coast businesses first, and every price is published in our complete price list.
If you are weighing up what to automate after invoices, the honest order is in what a small business should automate first.