Xero in on Xero; Automate Your Business with Invoice Reminders

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One of the roles Basis 365 Accounting plays to serve its customers is to help them constantly improve processes to help their business grow. One of the smaller, sometimes unnoticed features in Xero that helps collect cash and save business owners time are Invoice Reminders.

We often hear from business owners that they struggle to stay on top of their Accounts Receivable. They are so focused on getting new customers and keeping customers happy by delivering a great product or service that they forget to look back at making sure they collect from those who owe them.

Invoice Reminders are a great way to let Xero do the work for you. You can set these up in minutes, and it will save you hours throughout the year and hopefully thousands of dollars.

It is quite common that a customer’s accounting may not be very sophisticated or they may think you’re not serious about your Due Dates. Giving them a little nudge helps them know a payment is due soon and that you are on top of your game concerning your invoices.

Setting Up Invoice Reminders in Xero:

Turning Invoice Reminders ON

The first step is to navigate over to the Invoices by selecting Business from the navigation bar and selecting Invoices. Click the area circled below that says “Invoice reminders off” to go turn then ON.

On the Invoice Reminders configuration screen, tick the box for “Email customers when an invoice is …” to activate the configuration area. Xero defaults to three reminders, at 7, 14 and 21 days overdue. Take note that these will only go out AFTER the invoice is late.

Customizing Your Reminders for Your Business

We recommend you set up a reminder to give your customer a heads up the invoice is due soon so they will hopefully pay before or on the due date, and not after. Encourage them consistently to pay on time and immediately after it is late.

After clicking “Add reminder,” a simple pop up screen will appear. Change the “Send if an invoice is” drop down from “overdue by” to “due in” and enter the number of days.

Once you’ve added that reminder, you’ll see Xero puts the reminder in the proper order in the reminder timeline. This reminder helps you see what your customer will experience. Put yourself in your customer’s shoes and think about your brand and ideal customer experience to determine how many times and how far apart these reminders should be.

Even if your business style is relaxed and casual, take the collection of your invoices seriously. Timely cash flow is critical to growing and it will be challenging to un-train your customers to pay on time if you’ve allowed them to pay whenever they get to it.

Aside from the timing, you can customize each message by clicking “Edit” under each reminder. Use Placeholders to fill in their name, amount and other fields to make the message sound a little more personal and custom to that customer and what is due. Use Google to find some samples of nice invoice reminder email copy if you don’t want to use the Xero defaults.

Refining Who Receives Reminders

When you first turn ON invoice reminders, every customer will receive what you’ve set up going forward. You may have some customers that you charge a credit card on file and others you invoice and wait for them to pay. You won’t want invoice reminders to go out to customers that you charge automatically.

Think about which customers should and should not receive reminders. You can even configure a specific invoice not to receive reminders while that same customer will receive them for other invoices.

To turn reminders OFF for one invoice, open that invoice and click Invoice Options. Select “Turn invoice reminders off.”

Once you’ve selected this for one invoice, Xero gives you a little green pop up to help you turn all invoice reminders OFF for that customer if you so choose. Click it, and it will change the setting at the customer level.

To manually turn ON or OFF invoice reminders for a customer, you can search for the customer contact or the setting by clicking Options on the customer contact.

Troubleshooting Invoice Reminders

Xero provides a great guide on why a customer may not receive a reminder, so read over that, so you’re not surprised.

I hope you find Invoice Reminders to be useful to your business and getting them set a breeze. If you simply go with the defaults in Xero, you’ll have this setup in only a few minutes. Fully customizing this for your business shouldn’t take more than 15-30 minutes. It will be time well spent and shows that your business takes the product or service you deliver seriously enough to get paid.

Xero Pro Tip: Turn on Invoice Reminders in Xero to start getting paid faster in minutes.

Author Bio: Rhett Molitor is a cofounder at Basis 365 Accounting, who provides a cloud-based accounting and bookkeeping services for eCommerce, Software, and Service-based businesses. We play a leading role in mapping out efficient workflows and implementing solutions. Business owners understand what drives their financials and what they need to achieve their goals. Follow him on Twitter: @rhettmolitor