How to send chase overdue invoices by letter from Xero

Summary

• Most invoices get paid after one or two emails (80% in Trove’s data). Letters are the next escalation step.
• A letter works when emails are being ignored, filtered or going to the wrong person, and it tells the customer things have got more serious.
• Keep the early stages to email, and add letters near the end: letter 1 around 30 days overdue, letter 2 around 45, then a letter before action.
• Xero can’t post letters. You would have to print, post and log each one manually.
• Trove adds letters as steps in your chasing workflow, prints and posts them for you, and starts at £2.99 per letter on top of your plan.

When to send a letter chasing payment instead of another email

Most invoices don’t need a letter. Across the invoices Trove has chased that were later paid, 58% were paid after the first reminder and 80% within two. That’s why we suggest a short sequence of well-timed reminders as the default. Letters are for the tail: the smaller group of customers who still haven’t paid after several emails.

Send a letter when:

• Emails aren’t getting through. They’re being filtered, or they’re going to an accounts@ inbox nobody monitors.
• You’re not sure who to address. A letter to the registered address will almost always be opened and usually forwarded to the person who can help.
• You want the customer to know it’s serious. A letter reads as more formal than an email, before you get to a letter before action.
• You want a paper trail. A dated letter to the customer’s registered address is hard to claim you never received.

Where letters fit in your overdue invoice chasing sequence

Most customers chasing down their unpaid invoices will start with email. If emails bounce or are ignored, the next step is a letter. Here are sample timings for when to send emails and letters. Treat it as a starting point and adjust the timings to your payment terms and customers.

When	Step	Channel
3 days before due	Friendly reminder	Email
7 days overdue	First reminder	Email
14 days overdue	Second reminder, with a statement	Email
21 days overdue	Call the customer	Phone call reminder to your team
30 days overdue	Letter 1	Post
45 days overdue	Letter 2, the final letter	Post
60 days overdue	Letter before action	Post and email

Keep customers who are disputing an invoice, or who are on an agreed payment plan, out of the letter steps. And for a small invoice, a phone call often does more than a letter.

What to write in a letter chasing unpaid invoices

Here’s a sample of what you can include when writing a letter to a debtor. Making sure details like your business name and address are correct makes the letter look more credible.

For what you can add to the balance and when, see our guide to UK late payment fees.

Can Xero send letters by post chasing overdues?

No. Xero sends invoices, statements and reminders by email only. There’s no option to post anything.

To post a letter using only Xero, you can print the invoice or statement, write the covering letter, post it, then add a note in Xero to record that it went. It’s a long process and lacks automation.

How to send letters to chase invoices with Trove

Trove connects to Xero and treats a letter like any other chasing step.

• A letter is another step in your workflow, next to email, SMS and phone call reminders. You set when it goes e.g. at 30 days overdue.
• Write it in the same editor as your emails or SMS reminders. It has the customer’s address instead of a subject line, and pulls in the invoice details the same way an email does.
• Trove prints and posts it for you. It uses the customer’s address from Xero, so there’s nothing to copy across.
• Different letters for different customers. Letters can go to just some customer types, such as high-value accounts, while everyone else stays on email. Here’s how Trove workflows work.
• Review before it goes, or send automatically. In manual mode you approve each letter first. In automatic mode it sends on schedule.
• It starts at £2.99 per letter. If you need first class delivery or tracking, there may be additional costs.

Trove runs a free 30-day trial and takes about 15 minutes to connect to your Xero account. You can start a free trial here or book a demo if you’d like to see it first.

When to escalate to letter before action

If sending a letter gets no response, the next step is a letter before action: the formal warning before court. You can write your own and send it as the last letter step in Trove, or send a solicitor’s letter before action from Trove for £30 + VAT. Here’s what a letter before action costs and what happens next.

Frequently asked questions

Can Xero send invoice reminders by post? No. Xero only sends invoices, statements and reminders by email. To post a letter you have to print it and send it manually, or use a tool that connects to Xero and posts letters for you, such as Trove.

Should overdue invoice reminders be sent by email or post? Start with email. It’s faster and most invoices are paid within one or two reminders. Switch to post near the end of your sequence, when emails aren’t getting a response or you want the customer to know it’s serious.

When should I send an overdue invoice letter? Once your email reminders haven’t worked, usually around 30 days overdue. A second, final letter around 45 days overdue gives the customer a last chance before a letter before action.

How much does it cost to send letters with Trove? Letters can be sent one-off via Trove and cost £2.99. Trove prints and posts them for you, using the customer’s address from Xero.

Can I send a letter before action through Trove? Yes. You can write your own and send it as a letter step in your workflow, or send a solicitor’s letter before action for £30 + VAT. Trove securely passes the customer’s details to one of its approved solicitors, who sends the letter on their letterhead. Here’s what a letter before action costs and what to include.