A few months back Xero released a new feature. Automatic reminders for your customers to pay their outstanding invoice(s). This is a simple but really powerful feature for anyone who isn't paid by their customers immediately after invoicing.
Xero term this your:
"secret weapon to getting paid on time"
Why do we love this feature?
Cashflow is the lifeblood of any small business so it's important you do everything you possibly can to collect your money on time. This reduces your risk of not getting paid (ie having a bad debt) as well as helping with your cashflow. But the last thing you want to do is to have to pay a person to chase your invoices.
This feature is simply another way to #banadmin in your business.
The good news is you can even remind customers before their invoice is due. We love setting up email reminders to go out 2 days before the invoice is due as well as setting up at 2 days, 7 days and 14 days overdue.
All of this is automatic once setup, and if you have Pay Now setup in Xero all your customers need to do is click the Pay Now button to pay.
How do you setup?
As with most things in Xero this is relatively simple.
Step 1
Click on Settings and navigate to Invoice Settings. You will then see a nice big button Invoice Reminders. Click on this.
Step 2
Tick Email customers when an invoice is....
Step 3
This is where you can customise when the reminders are sent and what text is sent to the customer. Just click the Edit link.
We always suggest to start the 1st reminder 2 days before the Invoice is due. The text of this message should be a nice and friendly reminder that your invoice is due in 2 days time.
We then suggest a followup at 2 days after the due date. The longer you leave it the longer it will take you to get paid.
The next at day 7 overdue and then at day 14.
After that it's time to get on the phone and chase. The emails are clearly not working!
Extra
You can turn these notifications off for certain clients but realistically everyone should be paying you on time!
And note this assumes you are reconciling your Xero file regularly. You don't want reminders going to people who have already paid!
Important Note
This feature in Xero is a basic feature. You can only set 1 schedule - ie remind everyone at the same intervals, if you only reconcile on certain days you can't hold off on the automatic reminders and you can't see the replies in the Audit Trail.
For those of you with more than just the basic needs we always recommend Chaser. You can really customise when and what email is sent to different customers taking care of public holidays, working hours etc. The big difference we always see with Chaser is the reminders are human as opposed to automatic with Xero.
Chaser have produced a brilliant summary of The Chaser difference here and here
Next Steps
As always if you have any questions at all about how to set this up just give our resident Xero experts an email or call and they can help sort things out for you.
If you want to customise your chasing even more get in touch with Beau in our office and he can setup Chaser for you. This will ensure you have customised email templates that are chased at times you chose.
Otherwise jump in, turn on reminders, customise your email text and spend the time it took to chase your debts on something more productive.
