Automated invoice reminders for Xero

Xero has free invoice reminders built in, and you can switch them on in a couple of minutes. For a few invoices and clients who pay, that’s often enough — start there. But Xero’s reminders can’t react to what your client says — they send on a fixed schedule and stop only when the invoice is paid or credited.

Grace Period connects to Xero by one-click OAuth, watches your overdue invoices, and drafts human reminders on a schedule you set. When a client replies, it reads the message: a promise to pay is held to the date they gave, and if that date slips it drafts the follow-up in their own words. Disputes pause everything and get a drafted answer. Nothing sends without your approval, and it never touches or lends your money.

Grace Period is our product, so read this as our own account — but we’ve kept it honest. Xero’s built-in reminders are free and a sensible starting point; we’ve been plain about where they stop and where a dedicated tool begins.

Around half of all US B2B invoices are paid late, turning into cash on average 20 days past the due date (Atradius, Payment Practices Barometer – United States 2024). In the UK, 52% of small firms suffer from late payments — roughly 2.8 million businesses (FSB research, cited by GOV.UK, 2022) — and late payments are estimated to close 38 businesses every single day (GOV.UK, 2026). For a business running on project cash flow, the invoice that goes quiet is the one that hurts — and the follow-up you keep putting off is what would have fixed it.

You authorize the connection from inside Xero with one-click OAuth — no importing, no data entry, no spreadsheet to keep in sync. Grace Period reads your overdue invoices and, on the schedule you set, drafts a human reminder for each. You approve it and it sends.

The difference shows up when a client writes back. Grace Period reads the reply and acts on it: a “we’ll pay Friday” is logged as a promise and the schedule is auto-held to that exact date, so nothing nags the client in the meantime. If Friday passes without payment, it drafts your follow-up quoting the client’s own words. A dispute pauses the schedule and hands you a drafted answer; a question gets a drafted reply. You see every message before it goes; the tool handles the reading, remembering and drafting.

Xero is a live integration today, alongside QuickBooks, FreshBooks and FreeAgent, with Sage in beta. On something else? A plain CSV works with any setup.

Turn on what you already have before adding anything. Xero’s reminders are off by default, which is why plenty of people assume Xero doesn’t chase at all.

1. In the Business menu, select Invoices, then click Invoice Reminders: Off.
2. Tick Email customers when an invoice is… to switch reminders on.
3. Set each reminder to fire a number of days due in (before the due date) or overdue by (after it). Xero ships three defaults at 7, 14 and 21 days overdue.
4. Edit the subject and message on each stage so the wording escalates rather than repeating.
5. Optionally tick Don’t send reminders for amounts owing on an invoice under and set a figure, so small balances don’t trigger chasing.
6. Click Save.

You can run up to five reminder stages, which is more than QuickBooks allows, and the minimum-amount threshold is genuinely useful.

The hard limits: every stage is a fixed offset from the due date, the wording is the same for every client at that stage, and nothing in the sequence responds to what a client writes back.

Switching off Xero’s reminders isn’t the point. The line falls where your clients start replying: below that, Xero’s fixed schedule is fine; past it, you need a tool that can act on what they say.

Xero’s built-in reminders are the right call when: you have a small number of open invoices, your clients generally pay on time, and a polite nudge on a fixed schedule covers it. It’s free, it’s already in your ledger, and it works.

A dedicated tool earns its place when: chasing becomes a recurring time cost — clients reply and those replies need handling, promises need holding to a date, escalations need to read as human rather than automated, and disputes need to pause the sequence rather than draw another reminder. A fixed schedule can’t do that, because it can’t hear the reply. Grace Period is built around that reply. Other tools do detect replies, but we haven’t found one that documents holding the schedule to the date inside the promise.

Setup is short by design. Connect Xero with one-click OAuth. Choose the schedule you want reminders to follow. Review the first drafts and approve them. From there, Grace Period watches your overdue invoices and brings you a draft whenever there’s something to send — a first reminder, a follow-up on a slipped promise, or a reply to a client who got in touch. You approve; it sends. Nothing leaves on its own.

A fair test before you commit: connect a test account, send yourself a reminder, then reply as the client with “sorry, cash is tight — we’ll pay Friday.” Watch whether the tool keeps firing on schedule, or records the promise, holds to Friday, and has your follow-up written if it slips.