To automate invoice reminders, turn on the reminder feature in your accounting software first. Set a short schedule before and after the due date, make sure it stops when payment arrives, and exclude any customer who is in a dispute. Add AI only for the parts that need judgement: wording, sorting replies and deciding which invoices need a person.
This is one of the simpler jobs to automate, and it sits well with the first things to automate. If overdue invoices are tangled up with email, read how to get AI to reply to your business emails. For other paperwork that eats your week, see how to automate data entry. To plan a build for your own books, discuss an automation project.
Key facts
- Xero says automated reminders chase customers who have not paid, and that you need to connect Xero to your bank account so it stops sending reminders when payment arrives. Xero Central, accessed 10 November 2026.
- MYOB Business sends reminder emails on a schedule you set (before the due date, on it, or after it), with up to five reminders and a Friendly, Neutral, Firm or Urgent tone for each. MYOB, accessed 10 November 2026.
- The ACCC says a debt collector should only contact a debtor for a reasonable purpose and only when necessary. ACCC, accessed 10 November 2026.
- The ACCC and ASIC debt collection guideline (April 2021) is written mainly for individual debtors, but says many of its principles are also relevant to collecting small business debts. ACCC and ASIC, April 2021.
What is the simplest way to automate invoice reminders?
Use the reminder feature already inside your accounting software. It knows which invoices are unpaid, so it needs no extra connections.
- Check every invoice has a due date. Xero lets you set a default due date, so each invoice states how long the customer has to pay.
- Turn reminders on. In Xero, open the Sales menu, then Invoices, then Invoice Reminders. In MYOB Business, go to Sales settings, then the Reminders tab, and choose to send reminders to all customers.
- Connect your bank feed. Xero says it needs your bank account connected to stop reminders once payment arrives. Without that, a customer who has paid can still be chased.
- Choose a short schedule. One heads-up before the due date, one on or just after it, and one or two firmer follow-ups is enough for most small businesses. Both tools allow more, but more is not better.
- Write the messages once. Keep them short and polite. MYOB suggests keeping the wording short and clear, and matching it to the tone you choose.
Both tools let you leave out specific customers. Use that for anyone you are already speaking to.
Where does AI help, and where should it stay out?
AI adds value in the gaps the built-in schedule cannot cover. It should not be sending anything firm or unusual without a person seeing it first.
| Job | Let AI do it? | Why |
|---|---|---|
| Draft the reminder wording | Yes, then you approve the template | You review it once, then it is reused |
| Sort customer replies | Yes, as a suggestion | Labels such as paid, promise to pay or dispute |
| List overdue invoices that need a call | Yes | Saves you scanning the whole ledger |
| Write bank or payment details | No | They must come from your invoice or payment link |
| Send a final demand or mention legal action | No | A person must decide and word it |
| Reply to a dispute | No | It needs judgement and a record |
MYOB’s Overdue view already does a version of this. It shows days overdue and each customer’s average days to pay, then suggests an action such as send reminder, contact customer, or watch and wait. If you are on MYOB, try that before building anything.
When should a reminder stop and a person take over?
Write the stop rules down before you switch anything on. A reminder sequence that cannot stop is the usual way automation damages a customer relationship.
- Payment arrives. The sequence ends at once. Test this with a real paid invoice.
- The customer replies. Pause the sequence and send the reply to a person.
- The customer disputes the invoice. MYOB’s guidance is to consider turning reminders off for that customer or invoice until the issue is resolved.
- The customer mentions hardship, illness or a death. Stop and have a person call.
- The invoice is large, or the customer is a key account. Skip the automatic firm reminders and phone them.
- A payment plan is agreed. Switch the sequence off for that invoice.
Name who owns each exception. If nobody owns the replies, the automation is only a way to annoy customers faster.
What do Australian debt-collection rules mean for reminders?
The ACCC rules are written for debt collectors, and the joint ACCC and ASIC guideline is written mainly with individual debtors in mind. The guideline also says many of its principles are relevant when collecting small business debts. It is not a rulebook for a friendly reminder email, but it is a sensible guide to staying on the right side of the line.
The ACCC says a debt collector must not unduly harass or hassle the debtor, or mislead or deceive them. It lists acceptable reasons to make contact, including giving information about the account and money owed, making a demand for payment, and arranging repayment. For phone calls it recommends a maximum of 3 calls a week or 10 a month, within set hours.
For an automated sequence, that points to a few practical rules:
- Keep the sequence short and spaced out, rather than daily nagging.
- State only facts: invoice number, amount, due date and how to pay.
- Never threaten action you will not take or that is not available to you.
- Do not use AI to invent urgency or consequences.
This is general information, not legal advice. If a large debt or a vulnerable customer is involved, get advice before sending anything firm.
How do you test a reminder sequence before it goes live?
Test with fake or friendly customers before real ones.
- Create a test customer with your own email address and a small invoice.
- Confirm each reminder arrives with the right amount, due date and payment link.
- Pay the invoice and confirm the next reminder does not send.
- Reply to a reminder and confirm it reaches a person, not an unread inbox.
- Mark a customer as excluded and confirm they receive nothing.
Then switch it on for a small group of customers for a month and read what goes out.
Frequently asked questions
Can I automate invoice reminders in Xero or MYOB?
Yes. Xero can send automatic reminders for unpaid invoices, and MYOB Business can email reminders before the due date, on it, or after it. Both are set up in the accounting software, so you do not need a separate AI tool to start.
Do I need AI to chase overdue invoices?
No. A fixed schedule of reminders does most of the work. AI is useful for drafting wording, sorting replies into paid, promise to pay and dispute, and flagging which overdue invoices need a phone call.
How often can I contact a customer about an unpaid invoice?
There is no single number for every case. The ACCC says contact should only be for a reasonable purpose and only when necessary, and recommends a maximum of 3 phone calls a week or 10 a month for debt collectors. Keep your automated sequence short and well spaced, and check your own situation with an adviser.
Should reminders stop when a customer disputes an invoice?
Yes. MYOB’s own guidance suggests turning reminders off for a customer or invoice while a dispute is being resolved, to avoid confusing or conflicting messages. A person should handle the conversation.
Should an AI tool ever change bank details in a reminder?
No. Payment details should come from your accounting software’s invoice or payment link, not from text an AI tool generates. Any customer request to change bank details should go to a person.
What should you do next?
Open your accounting software and turn on reminders for one test customer today. If you want help connecting reminders to your inbox, CRM or phone follow-up, start with an automation audit.
