Got outstanding invoices? Try these four tips to speed things along

Got outstanding invoices? Try these four tips to speed things along

If it feels like your invoices are spending more time outstanding and unpaid, it’s not just you. U.S. small businesses wait an average of 28.8 days for their invoices to be paid, according to Xero Small Business Insights research conducted in the first quarter of 2026. That’s almost a month between charging for the work and getting paid for it.

A month can last a long time when you have staff to pay, bills to cover, and a business to sustain. For small businesses, margins are already tight, so the pressure’s on to make every dollar go further.

The following tips from Xero’s guide on chasing invoice payments can help you encourage faster payments, shorten the invoice cycle, and make it easier to maintain healthy cash flow and customer relationships.

1. Be upfront about your payment terms

Before starting any work for a customer, make sure you’re both agreed on payment terms.

Your terms should include the payment cycle (14 days, 30 days, 60 days, etc.) and a due date for payment. Also, include any late payment fees. An additional 1%-2% on the amount is common for most businesses, but you can also opt for a flat fee if that is easier to implement.

The role of payment terms is to clear up any ambiguity. If your customers know exactly what’s expected from them at the beginning, it’s much harder to justify late payments and unpaid invoices. Having this conversation upfront is also more comfortable and proactive than having the difficult discussion of an overdue invoice.

Customers may also come to you with their own payment terms. For example, they might need you to send the invoice a certain number of days before the due date to ensure payment is made on time.

2. Follow up on invoices before they’re due

After sending your invoices, weeks may pass before they’re actually due. You can bring them to the top of your customers’ minds again by sending a follow-up note before the deadline.

When you’re deciding when to send a follow-up message, think about how long your customer will need to process the payment. A reminder 24 hours before the due date may not be enough time for payment processing.

Change the timing of your reminders depending on your payment terms. For example, a net 30 invoice can be nudged a week before the due date, but a net 14 invoice can be nudged closer to the deadline.

You can keep the message simple — try an email template like this:

Hello [insert client name],

Here’s your reminder that invoice [insert number] is due on [insert deadline].

If you have any questions, feel free to reach out.

[your signature]

3. Standardize your process for nudging overdue invoices

Small business invoices are, on average, paid nine days late, according to Xero Small Business Insights data. Silence won’t encourage your customer to pay — being proactive will.

An overdue invoice process that you can kickstart at a moment’s notice will help you keep the pressure on a customer to settle their bill.

1-3 days overdue: email reminder

A short, polite email containing the invoice number, amount, deadline, and days overdue should suffice. You don’t need to over-explain or apologize, but make sure you attach the invoice and give the customer all the information they need to see that the payment is overdue.

7-10 days overdue: follow-up email

Here, your message to the customer can be more direct. Highlight the first reminder that was overlooked, and offer to answer any questions. This is also a good opportunity to point out late payment fees, if you have them in your agreement with the customer. The prospect of a larger bill, with late fees added on, could be enough for your customer to prioritize paying.

14+ days overdue: call

If the invoice and the two follow-up emails have been ignored, switch up your communication channel. Before calling the client, write out what you need to cover in the conversation. This can help with any nerves you might be feeling about the conversation.

Keep the call brief, and ask the customer for a specific payment date. Make sure you point out the impact of late payments on your business to show your customer how it’s affecting your business. Stick to the script you’ve written for yourself to avoid making it personal, and keep things brief.

If you have multiple invoices from the same customer

Do the work of bringing everything together for your client by sending a consolidated statement of accounts, summarizing all of their outstanding invoices. By highlighting that you have the information and a paper trail, this makes the reality of overdue payments harder to deny.

This also shows that you have the records to take this to a debt collection agency or lawyer should the situation escalate. In most cases, you’ll be able to resolve the issue before it gets to this stage.

4. Automate the chase to save yourself time

If you’re using accounting software, chasing invoice payments is much easier and requires less admin. For example, you can set up automated reminders in your software to trigger at specific times — such as the due date, and regular intervals after the payment is due.

You can also use the accounts receivable function in your software to monitor all outstanding invoices. This will show you which payments you’re waiting on, making planning for cash flow gaps easier.

Instead of checking every individual invoice and deadlines, run an aged receivables report to track outstanding invoices in the software. Review the aged receivables report at regular intervals to make sure you’ve got complete oversight of what’s due.

Know when to escalate the situation

There may come a time when even the strongest invoicing process falls flat. Customers can fall into financial difficulty or fail to plan for upcoming payments properly. This isn’t your fault, but it’s something you need to be prepared for.

If your follow-up sequence doesn’t work, consider:

• Offering a payment plan for customers struggling to pay the full bill. You could divide the amount into parts, split across several weeks or months.
• Pause work until the balance is paid. This ensures you’re not committing resources and time to work that may not be compensated.
• Work with a debt collection agency or lawyer in worst-case scenarios. Reserve this for circumstances where the relationship with the customer is unlikely to be preserved.

You might also decide that some preventative steps are necessary for future clients. Introducing credit checks for clients or requesting a partial payment upfront could help you avoid working for no compensation.

Make invoicing best practices a habit

For a small business, there’s a lot that can happen in the 28.8 days between sending an invoice and getting paid. A follow-up sequence that’s standardized and simple to implement will help you keep on top of outstanding invoices, closing the gap between ‘sent’ and ‘paid.’

This story was produced by Xero and reviewed and distributed by Stacker.