How to Automate Overdue Invoice Follow-Ups for Australian Small Business

June 30 is less than six weeks away. If you have outstanding invoices sitting in your accounting software right now, you are not alone. Australian small businesses collectively carry billions in unpaid invoices at any point in time, and the average wait for payment sits at around 37 days, well past standard 30-day terms, according to research from the Australian Small Business and Family Enterprise Ombudsman (ASBFEO).

The problem is not just the money. It is the time spent chasing it and the discomfort of having to do it at all. Most business owners hate following up on overdue invoices. It feels awkward. It delays the conversation. So they wait too long, send one half-hearted email, and either write the debt off or end up in a difficult phone call months later.

Automation fixes the consistency problem. Your software sends reminders on schedule whether you feel like it that day or not. Here is how to set it up, depending on what tools you already have.

Three ways to automate invoice follow-ups

Option 1: Use the reminders built into Xero or MYOB

If you are already on Xero or MYOB, you probably have automated reminders switched off without realising it. Both platforms include payment reminder tools at no extra cost.

In Xero, go to Accounts > Invoices > Invoice Settings > Payment Reminders. You can configure up to three reminder emails, set how many days after the due date each fires, and write your own message. Xero also shows which reminders were sent and whether the client opened them.

MYOB AccountRight has a similar setup under Setup > Preferences > Emailing. You define the days and the template; MYOB handles the rest. Essentials users can configure reminders inside Invoice Settings.

This costs nothing extra and takes about 15 minutes to configure. Start here before looking at anything else.

Option 2: Zapier plus an email template

If your accounting software does not support reminders, or you want more control over the messaging, Zapier can connect your invoicing tool to Gmail or Outlook and send emails on a schedule.

A basic setup works like this: a new overdue invoice triggers a Zap, which waits a set number of days and sends a pre-written email. You build the template once, and it goes out automatically from then on. Zapier’s free plan supports five Zaps. A paid plan starts at around AU$29/month and gives you more flexibility and multi-step options.

This approach takes an hour or so to set up but gives you full control over timing and message content.

Option 3: Chaser or Debtor Daddy

For businesses with a high volume of invoices, or clients who consistently pay late, a purpose-built tool is worth the monthly cost.

Chaser connects to Xero and MYOB and manages your entire follow-up sequence. It sends emails, SMS reminders, and automated calls. It tracks which clients opened your emails, flags accounts most likely to pay late based on past behaviour, and logs every communication. Plans start from around AU$50/month.

Debtor Daddy is built specifically for AU and NZ businesses and integrates with Xero and MYOB. It automates the follow-up sequence and includes a client-facing payment portal where customers can pay or dispute invoices directly. Pricing is based on invoice volume.

Both are worth considering if invoice chasing is eating more than a few hours per month.

The follow-up sequence that works

Regardless of which tool you use, timing and tone matter. Here is a sequence that gets results without burning client relationships:

Day 7 (one week overdue): Keep it friendly and assume they forgot.

Hi [Name], just a quick note that invoice #[INV] for [amount] was due on [date]. If you have already sent payment, please ignore this. Otherwise, you can pay via [link]. Thanks, [Your name]

Day 14 (two weeks overdue): A bit firmer. Ask for a confirmed payment date.

Hi [Name], following up on invoice #[INV] for [amount], now 14 days overdue. Can you let me know when payment will be made? If there is an issue with the invoice, I am happy to discuss.

Day 30 (one month overdue): Formal tone. Reference your payment terms.

Hi [Name], invoice #[INV] for [amount] remains unpaid and is now 30 days overdue. Under our payment terms, interest may apply from this point. Please make payment within five business days or contact me to arrange a payment plan.

Day 45 (six weeks overdue): Final notice before escalation.

Hi [Name], this is a final notice for invoice #[INV] for [amount], which is now 45 days overdue. If payment is not received by [date], I will need to refer this matter to a debt collection agency. Please contact me urgently to resolve this.

The tone progression matters. Starting too aggressively damages relationships with clients who simply forgot. Starting too gently with clients who are deliberately avoiding you wastes time. This four-stage sequence covers both.

Using AI to write your templates

If the above scripts do not quite fit your situation, Claude or ChatGPT can write templates calibrated to your context in seconds.

Give it specifics: the invoice amount, how long it has been overdue, your relationship with the client, and how firm you want to be. A prompt like: “Write a professional but firm email for a $4,200 invoice that’s 30 days overdue. The client is a regular customer and I want to preserve the relationship but make clear I expect payment this week” will produce a usable draft immediately.

The key step: read it out loud before sending. If it sounds like a legal document when your usual style is casual, soften it. If it sounds apologetic when you need to be direct, tighten it. The AI gives you a starting point; your voice makes it work.

When automation is not enough

Some clients will not respond to emails, no matter how many you send. If you have hit day 45 with no reply, here is the escalation path:

1. Pick up the phone. A five-minute call resolves more than a dozen emails. It is harder to ignore.
2. Offer a payment plan. If cash flow is the client’s problem, a structured plan is better than writing the debt off. Get it in writing.
3. Engage a debt collection agency. Australian agencies like Prushka and Creditcorp work on a commission basis, so there is no upfront cost. You will lose a percentage, but you will recover something.
4. Small claims or AFCA. For disputed invoices or amounts under the small claims threshold, the Australian Financial Complaints Authority (AFCA) and state small claims tribunals are available options.

The most important thing right now, with EOFY approaching: do not wait until August to start chasing June invoices. Set your reminders up this week so anything unpaid by June 30 goes into an automatic follow-up sequence from day one. The longer you wait, the harder the conversation gets.

Sources

• Australian Small Business and Family Enterprise Ombudsman (ASBFEO): Payment Times and Practices Inquiry
• Xero: Payment Reminders Setup Guide
• MYOB: Sending Reminders to Customers
• Chaser: Invoice Chasing Automation
• Australian Financial Complaints Authority (AFCA): Making a Complaint

This guide is part of the SmallBizAI.au Automation Hub — practical automation guides for Australian small business.

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