Who owes me money? Finding unpaid invoices in Xero and getting paid

If the bank balance is lower than you expected, the first question worth asking is not “what did we spend?” but “who has not paid us yet?”. The invoices owed to you widget on the Xero dashboard gives the total; this guide is about the detail behind it. In many service and trade businesses, money owed by customers is the biggest single reason profit and cash drift apart.

Xero already knows the answer. It is spread across a few screens, and this guide shows where to look, how to decide who to chase first, and the settings that make the next invoice get paid sooner.

Menu names move between Xero releases and differ slightly by region, so if a label below does not match your screen, search Xero Central for the report name.

The two-minute answer: who owes you right now

1. Open the invoices list (Business, then Invoices, in most versions). The Awaiting payment tab lists every approved invoice that has not been fully paid. Sort it by due date to see the oldest first. Many versions also show an overdue count or filter.
2. Run the Aged Receivables Summary (under Reports). It shows one line per customer with what they owe split into columns: current, under a month past due, one to two months, and so on. This is the report to look at when you want the whole picture on one page.

The Aged Receivables Summary is usually more useful than the invoice list because it groups by customer. Ten small invoices from one customer look harmless in a list and obvious in the summary.

One setting matters: ageing by due date puts an invoice in a column for how far past its due date it is, which is what “overdue” means to most owners. Ageing by invoice date counts from the day you raised it. If your numbers look odd, check which one is selected. The aged debtors and creditors guide covers the settings in detail.

Owed is not the same as overdue

The total in the Aged Receivables report includes invoices that are not due yet. A customer on 30-day terms who was invoiced last week owes you money but is not late. The number that needs action is the part past its due date.

Two quick checks:

• What share of what you are owed is overdue? If most of it is current, you are just waiting on normal terms. If half or more is past due, customers are using you as a bank.
• How long do customers take on average? Debtor days (what you are owed, divided by average daily sales) turns the total into a number of days you can compare with your payment terms. The free debtor days calculator works it out from two figures and shows how much cash is tied up beyond your terms. If the terms themselves are the problem, invoice payment terms: 7, 14 or 30 days? shows what each choice ties up. To compare collecting faster with the other ways to free cash, see how to improve cash flow in a small business.

Who to chase first

Not every overdue invoice deserves the same effort. A simple order that works for most small businesses:

Priority	Who	Why
1	The largest overdue amounts	A single call that brings in a big balance moves the bank more than ten small reminders
2	Anything over 60 days past due	The longer an invoice is overdue, the less likely it is to be paid in full
3	Customers you still do work for	You have leverage now; you lose it once the job is finished
4	Small, recent overdue invoices	An automatic reminder usually handles these

Also look at how much of your sales come from one customer. If one client is a large share of what you invoiced over the last few months and they start paying late, it hits cash much harder than the same delay from a small customer. The free customer concentration calculator shows that share and what losing them would do to your profit.

What to say

A short, specific message beats a polite, vague one. Include the invoice number, the amount, the original due date and how they can pay. Attach the invoice or the online invoice link so there is nothing to look up. A phone call is often faster than a third email for anything large or long overdue. For a customer with several open invoices or a credit, send a customer statement first, and say in your note which invoices are overdue, so you both start from the same figure. In the UK you can also add statutory interest and £40 to £100 of fixed compensation to a late business invoice; the late payment interest calculator works out how much.

Settings that get the next invoice paid sooner

• Automatic invoice reminders. Xero can email customers a reminder a set number of days before or after the due date. Look for invoice reminders in your invoice settings and turn on at least one reminder a few days after the due date. The Xero invoice reminders guide has a three-step schedule, wording for each reminder and the reasons a reminder never sends.
• Online payments. Connecting a payment service to your invoice template adds a pay-now option to the online invoice, so the customer can pay by card or direct debit without keying in bank details. Check the fees before you switch it on.
• Shorter, clearer terms. “Due on the 20th of the following month” is easy to miss. A due date printed in full on the invoice (“Due 14 November”) is harder to ignore.
• Invoice as soon as the work is done. Every day between finishing a job and sending the invoice is a day added to how long you wait for the money.
• Deposits or progress invoices for larger jobs, so you are not funding the whole job until the end.

How much this is worth

Getting paid faster does not change your profit, but it changes your cash, and it does so permanently while the habit lasts. If a business with $40,000 of monthly sales gets customers to pay 10 days faster on average, about $13,000 more sits in the bank at any point in time ($40,000 × 12 ÷ 365 × 10). Use the cash runway calculator to see what that does to how long your cash lasts, and the profit but no cash guide if you want to trace where the rest of the gap comes from. Late payers also make Xero’s 30-day projection look better than it will be; Xero short-term cash flow shows how to correct for them.

Common questions

Which Xero report shows who owes me money? The Aged Receivables Summary, under Reports. It lists each customer once with what they owe split by how late it is. Click a customer to see the invoices behind their total, or open the Aged Receivables Detail for every invoice at once.

Why does Xero say a customer owes more than I think? Usually a payment that arrived in the bank but was never matched to the invoice, a credit note that was not allocated, or a part payment. Reconcile the bank account first, then check the customer’s invoices for open credits; the total often drops once those are matched.

Can Xero chase late payers for me? Yes. Invoice reminders email the customer automatically a set number of days after the due date, with a link to the online invoice. They only go to invoices that were sent and have a contact email, so check those two things if a reminder never arrives.

How much overdue money is too much? Compare debtor days with your payment terms. On 30-day terms, customers taking 35 to 40 days on average is normal drift; 60 days means you are funding them for a month. As a rough guide, if more than a third of what you are owed is past due, chasing is worth an hour this week.

What do I do with an invoice that will never be paid? Write it off as a bad debt so the Aged Receivables report and profit stop counting it. In Xero this is usually done by applying a credit note, or a part payment, to a bad debts expense account. The bad debt write-off guide has the steps and when you can claim the GST or VAT back; ask your accountant how it applies to you before you do it.

Getting this every Monday without running the report

ReportPilot reads your Xero figures and sends a short plain-English email every Monday. When customers owe you money that is past due, it says how much in total and across how many invoices, names the biggest overdue customers with the amount and how many days late each one is, and when the biggest one is worth a call it suggests chasing that customer first. It also flags when one customer makes up a quarter or more of what you invoiced over the last three months. It asks Xero for read-only access, so it can read invoices but never change or send them, and there is a 14-day free trial with no card.