How to Automate Chasing Overdue Invoices (So You Never Have to Again)

Chasing overdue invoices is one of the most time-consuming parts of running a small business. You did the work, you sent the invoice, and now you’re writing polite follow-up emails you shouldn’t have to write.

This is almost entirely automatable. With Xero and Zapier, you can set up a system that sends reminders automatically, escalates if needed, and stops the moment payment lands. Here’s how.

What you’ll need

• Xero: invoicing and accounting. Free trial, then from $32/month AU.
• Zapier: connects apps and automates workflows. Free plan handles basic reminders.
• Gmail or Outlook: for sending follow-up emails.
• Optional: Twilio via Zapier. SMS nudge for seriously late invoices.

Total cost to start: $0 if you’re on Xero’s trial and Zapier’s free plan.

Step 1: Turn on Xero’s built-in reminders

Before touching Zapier, check what Xero already does for free. Go to Accounts > Invoices > Invoice Settings > Reminders. You can schedule reminders before the due date, on the due date, and at intervals after. Xero sends these automatically. Most users don’t know this feature exists.

This alone handles the majority of late payments with no extra setup.

Step 2: Build a Zapier escalation for 14+ day overdue invoices

For invoices that are still unpaid after two weeks, you want a more direct follow-up. Here’s the Zapier workflow:

1. Trigger: Xero. Invoice becomes overdue
2. Filter: Only continue if overdue by more than 14 days
3. Action: Gmail: send a personalised follow-up email
4. Optional: Log the follow-up in a Google Sheet for your records

Zapier pulls the client name, invoice number, amount, and due date directly from Xero, so every email looks personal even though you wrote it once.

A follow-up email that gets results

Most automated reminders sound robotic. This template doesn’t:

Subject: Invoice #[Invoice Number]: quick follow-up

Hi [Client First Name],

Following up on Invoice #[Invoice Number] for [Amount], due [Due Date].

If payment is already on its way, ignore this: thank you!

If not, you can view and pay the invoice here: [Invoice Link]

Happy to answer any questions.

[Your Name]

No passive aggression. Just clear, professional, and easy to act on.

Step 3: Make sure it stops when they pay

The most important part of any invoice automation: it must stop the moment payment lands.

Xero’s built-in reminders stop automatically once an invoice is marked paid. If you built a custom Zapier flow, add a filter at the start: only continue if invoice status is still “awaiting payment.” Sending a reminder to someone who already paid is worse than sending no reminder at all.

What this saves you

Most small business owners spend 2-4 hours a week chasing invoices. Set this up once and that time drops to zero. Xero’s own research shows invoice reminders reduce late payments by 30-40%. For a business with 20 invoices a month averaging $1,500 each, getting paid 10 days faster frees up more than $30,000 in cash flow. That matters.

Not using Xero?

The same approach works with other tools:

• MYOB + Zapier: same workflow, different trigger
• FreshBooks: built-in late payment reminders
• Wave: free invoicing with basic reminder functionality
• Make (formerly Integromat). Zapier alternative, often cheaper at volume

The logic is the same: trigger on overdue, filter by days late, send a human-sounding email, stop when paid.

Related guides

• AI and Xero: Beyond the Basics for Australian Small Business
• How to Connect Xero, Gmail and ChatGPT with Zapier
• Zapier and AI: Automation for Australian Small Business

Photo: Vagaro via Unsplash

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