Get paid on time. Without the awkward chase.
Late payment is usually a process problem, not a people problem. Here's a simple, consistent debtor management routine any NZ or Australian small business can run, and the parts you can automate.
01 · The routine
1. Set clear payment terms up front
Put your payment terms on every quote and invoice: when payment is due, how to pay, and what happens if it's late. Clients can't stick to terms they've never seen, and it's much easier to point back to terms they agreed to before the work started.
2. Check new clients before you extend credit
For bigger jobs or new clients, ask for a deposit or progress payments rather than one invoice at the end. The less you're owed at any one time, the less you have to chase.
3. Invoice straight away
The sooner the invoice goes out, the sooner the clock starts. Invoicing as soon as the job is done also keeps the work fresh in your client's mind, so there are fewer questions about what they're paying for.
4. Make paying easy
Show your bank details and invoice number clearly, and offer online or card payment if you can. Every extra step is another reason to put it off.
5. Follow up on a schedule, not when you remember
Decide your reminder steps once and stick to them for every client. For example: a friendly nudge around the due date, a firmer reminder a week later, then a final notice. Consistency is what makes reminders work, and it takes the emotion out of chasing.
6. Know when to pick up the phone
Some overdue invoices need a conversation, not another email. Watch for clients who stop responding or keep slipping, and call them early. Ask if something's wrong with the job or the invoice; often there's a simple fix.
7. Agree a plan if they can't pay in full
A client who's struggling may pay reliably on a short payment plan. Put it in writing, with dates and amounts, and keep following up against it.
8. Escalate when you need to
If an invoice stays unpaid after your final notice, decide your next step: pausing further work, using a debt collection agency, or formal recovery. For legal options, get professional advice.
9. Review your debtors every week
Set ten minutes a week to look at who owes you what and for how long. Most accounting software, including Xero, has an aged receivables report that shows this at a glance.
02 · What you can automate
Steps 5 and 6 are where most small businesses fall behind. Not because they don't know what to do, but because chasing is the first thing dropped on a busy week.
Our Overdue Invoice Chaser checks Xero every morning, writes the right follow-up for each overdue client (polite, then firm, then final), and tells you who needs a call. You approve each reminder before it's sent. $249 setup, $30 a month.
Questions
What is debtor management?
Debtor management is how a business keeps track of the money customers owe it and makes sure it gets paid: setting clear payment terms, invoicing promptly, following up on overdue invoices, and knowing when to call or escalate.
What's a good reminder schedule for overdue invoices?
Many businesses send a friendly reminder a few days before or on the due date, a firmer reminder about a week after, and a final notice a couple of weeks after that, then pick up the phone. The exact days matter less than doing it the same way for every client.
Should I charge late payment fees?
Only if your terms say so and the client agreed to them before the work started. If you want to charge interest or fees on late payments, put it in your terms and on your invoices, and get advice on what's reasonable for your industry.
When should I call instead of emailing?
When a client has stopped replying, keeps slipping past promised dates, or owes a large amount. A short, friendly call often sorts out what three emails couldn't.
Can debtor management be automated?
The routine parts can: spotting overdue invoices, sending the right reminder at the right time, and flagging who needs a call. Our Overdue Invoice Chaser does this every morning from Xero, and you approve each reminder before it goes.
Next step
Spending too much time chasing invoices? Tell us roughly how many you send a month and what you use to send them. We'll tell you what's worth automating.