How to Stop Chasing Invoices (And Still Get Paid)

Every week, thousands of Australian small business owners do the same thing: open their accounting software, scroll through a list of overdue invoices, and start writing awkward emails. "Just following up on invoice #1247..." Sound familiar?

Here is the uncomfortable truth. If you are spending more than 30 minutes a week chasing overdue invoices, you are not managing your cash flow. You are managing a broken process. And it is costing you far more than you think.

The good news? You do not have to keep doing it this way. There are proven strategies that get invoices paid faster, protect your client relationships, and give you back your time. Let us walk through all of them.

The real cost of chasing invoices

Most business owners think of unpaid invoices as a cash flow problem. It is, but that is only part of the picture. Chasing invoices costs you in three ways that are easy to overlook.

Time. According to a 2024 Xero Small Business Insights report, Australian small businesses spend an average of 12 hours per month on invoice-related admin. That is a full day and a half every month that you could spend on billable work, business development, or simply not working on a Friday afternoon.

Relationships. Nobody enjoys writing "just following up" emails. But your clients do not enjoy receiving them either. Every manual chase is a micro-friction point in an otherwise healthy business relationship. Over time, these add up. Some businesses lose clients not because of poor service, but because the payment experience felt confrontational.

Cash flow. Late payments create a domino effect. When your clients pay late, you pay your suppliers late. When you pay suppliers late, your credit terms get tightened. And when your credit terms get tightened, your operating costs go up. The Australian Small Business and Family Enterprise Ombudsman found that late payments contribute to 53% of small business insolvencies.

The real cost of chasing invoices is not just the unpaid amount on the invoice. It is the compound effect of lost time, strained relationships, and cascading cash flow problems.

5 ways to stop chasing invoices

The goal is not to stop caring about getting paid. It is to build systems that handle the chasing for you, so you can focus on running your business. Here are the five strategies that actually work.

1. Set clear payment terms from the start

The most common reason invoices go unpaid is not that clients refuse to pay. It is that they are unclear about when payment is due, how to pay, or what happens if they are late. Ambiguity is the enemy of prompt payment.

Before you start any project, agree on payment terms in writing. Include the payment due date (not just "net 30" but an actual calendar date), accepted payment methods, and any late payment penalties. Put these on every invoice, every quote, and every contract. When expectations are crystal clear, most clients pay on time without being asked.

2. Automate your reminders

Manual follow-ups are inconsistent. You send them when you remember, which is usually after the invoice is already overdue. By then, you are already frustrated, and it shows in your tone.

Automated reminders solve this by sending polite, professional nudges at set intervals. A typical sequence might look like this: a friendly reminder 3 days before the due date, a "now due" notice on the day itself, a follow-up at 7 days overdue, and an escalation at 14 days. The key is that these go out automatically, every time, with the same professional tone. No emotion, no awkwardness, no forgetting.

3. Offer multiple payment methods

If your invoices only offer bank transfer as a payment option, you are adding friction. Some clients prefer credit card. Others use PayPal or direct debit. The easier you make it for someone to pay, the faster they will pay.

Xero and other modern accounting platforms support multiple payment gateways. Turn them on. The small transaction fee is worth it when you compare it to the cost of chasing a 30-day overdue invoice.

4. Charge late payment fees

This is the one most small businesses skip because it feels uncomfortable. But late payment fees are not about punishment. They are about incentive. When clients know there is a financial consequence for paying late, they prioritise your invoice.

In Australia, you can legally charge late fees if they are agreed upon in your terms and conditions before the work begins. A typical rate is 2% per month on the outstanding balance. Make sure it is clearly stated on every invoice and in your initial contract. For more detail, read our guide on late payment fees in Australia.

5. Use a dedicated tool

Spreadsheets and calendar reminders are not a system. They are a workaround. If you are serious about getting paid on time, you need a purpose-built tool that connects to your accounting software, monitors invoice status in real time, and handles the follow-up automatically.

This is exactly what [ProductName] was built to do. It connects to Xero, watches your invoices, and sends professionally worded reminders at the right time. You set the rules once, and the system handles the rest.

How automation changes everything

The shift from manual chasing to automated reminders is not just a time-saver. It changes the dynamic of your client relationships. When a reminder comes from an automated system, it feels professional and routine. When it comes from you personally, it can feel confrontational.

Think of it this way: nobody gets upset at their bank for sending a credit card payment reminder. It is expected. It is professional. It is just how things work. Automated invoice reminders create the same expectation with your clients.

Businesses that switch to automated reminders typically see a 35% to 50% reduction in overdue invoices within the first two months. That is not just faster payments. It is fewer awkward conversations, less time spent on admin, and more predictable cash flow.

And here is the part that most people do not expect: your clients actually appreciate it. A polite, timely reminder helps them stay on top of their own accounts payable. You are not being pushy. You are being organised.

The bottom line

Chasing invoices is one of those tasks that feels necessary until you realise it does not have to be. You would not manually calculate your tax each quarter. You would not hand-write every client email. So why are you still manually chasing payments?

Set clear terms. Automate your reminders. Make it easy to pay. And use the right tools. Do those four things, and you will spend less time chasing, more time growing, and a lot less time staring at your overdue invoices list wondering who to email next.

Your time is worth more than "just following up."