Tessa stared at her laptop screen, scrolling through the unpaid invoices list in Xero for the third time that week.

$18,000 outstanding. Some of it was 60 days overdue. Some of it was from jobs Mark finished three months ago.

"Did you send the invoice?" she'd asked him last week.

"Yeah, yeah, sent it," Mark had mumbled, already halfway out the door to the next job.

But when Tessa checked, half of them had gone out without payment terms. One didn't even have their bank details on it. Another was still sitting in "draft" because Mark couldn't figure out how to make it look "professional enough".

Meanwhile, their bills didn't care about professional enough. They wanted payment, too.

Sound familiar?

The reality about invoices is that they're not just pretty receipts you send to keep the accountant happy.

They're your business asking to be paid for work you've already done. And if they're unclear, unprofessional, or missing basic information, you're making it way too easy for customers to ignore them.

Thankfully Xero invoice templates can do most of the heavy lifting for you. Once you set them up properly, sending invoices becomes a two minute job instead of a 20 minute faff around trying to remember what goes where.

Let's talk about how to set up invoice templates that work.

WHY YOUR INVOICE TEMPLATE MATTERS MORE THAN YOU THINK

When you're chasing $18,000 in unpaid invoices, every day that money sits in someone else's account is a day you can't use it to pay wages, cover supplies, or keep the lights on.

Invoice templates help you get paid faster because they:

Make it super simple for customers to pay you - clear bank details, multiple payment options, no hunting around for information. Details on what they are paying for is also important for some customers too.

Set expectations upfront - payment terms right there in writing means no "I didn't know it was due" excuses.

Look professional - shows you take your business seriously, which makes customers take payment seriously. Keeping logos and colours consistent can keep your brand recognisable and memorable for next time your customer needs you.

Save you time - no reinventing the wheel every time you need to send an invoice, it’s right there ready for you.

If you're using the basic Xero template straight out of the box, you're probably missing some easy wins that could shave days (or weeks) off your payment times.

SETTING UP YOUR XERO INVOICE TEMPLATE (THE RIGHT WAY)

Step 1: Brand It (even just a little bit)

You don't need a fancy designer logo, but your invoice should look like it comes from your business.
In Xero, go to the organisation in the top left corner > Click the drop down arrow > Settings > Invoice Settings > Branding Themes.

Upload your logo if you have one. If you don't, just make sure your business name is clear and legible at the top.

Choose colours that match your business. Keep it simple - one or two colours maximum. You want it to look professional, not like a kids art project.

Add your contact details in the footer - phone number, email, website. Make it easy for customers to get in touch if they have questions (because they will).

Step 2: Get Your Payment Terms Crystal Clear

This is where most invoices fail. If you don't tell customers when you expect payment, they'll pay you whenever they feel like it (which is usually never).

Under Invoice Settings, set your default payment terms. Common options:

• Due on receipt (for smaller jobs or new customers)
• 7 days (keeps things moving quickly)
• 14 days (standard for most trades)
• 30 days (if you're dealing with larger companies who have their own payment cycles)
• 30 days after EOM (beware this hidden cash gobbler! An invoice sent on 3rd February will be due for payment on 30th March)

Whatever you choose, make sure it shows clearly on the invoice. Xero puts it in the terms section, but you can also add it to your custom message: "Payment due within 7 days of invoice date.".

And here's a tip Mark learned the hard way - put your payment terms in writing BEFORE you do the work. Include them on quotes, mention them when you book the job. That way there's no surprises when the invoice lands in their inbox.

Step 3: Make It Easy to Pay You

The harder you make it to pay you, the longer it'll take to get paid. It's that simple.

Add multiple payment options directly on the invoice:

Bank transfer details - account name, BSB, account number. Don't make them hunt through old emails to find it.

Set up Xero's online payment option - customers can pay by card directly from the invoice. Yes, there's a small fee, but getting paid today is worth more than saving 1.5% and waiting 45 days.

Quick hint: see if you can set up the fee to be added on to the customer’s bill, not yours.

Include a payment reference - use the invoice number so you can match payments easily when they hit your bank account.

Tessa added card payment to their invoices and noticed something interesting - the invoices that went to homeowners got paid within days instead of weeks. Turns out, people will pay you right now if you let them click a button and be done with it.

Step 4: Set Up Automatic Reminders

This is the best feature in Xero that nobody uses enough.

Go to Settings > Invoice Reminders and switch them on.

You can set up three types:

• Before the invoice is due - "Friendly reminder your payment is due in 3 days"
• When the invoice is due - "This invoice is due today"  
• After the invoice is overdue - "This invoice is now overdue"

Xero sends these automatically. You don't have to remember. You don't have to feel awkward. The system just does it.

Mark used to hate chasing payments. It felt rude. But when the reminder comes from "the system" instead of from him personally, customers pay up without anyone getting upset.

Expert tip: Remember to delete the line that says “If you have already paid, please ignore this message” - we want them to contact you if it’s been paid, as something could be wrong.

Step 5: Include Job Details

Ever had a customer query an invoice because they couldn't remember what it was for?

Include enough detail on the invoice so they know exactly what they're paying for:

• Job address or description
• Date work was completed
• Breakdown of materials vs labour (if relevant)
• Any quote or job number they've already got

You don't need to write an essay, but "Plumbing work" isn't helpful to anyone. "Kitchen tap replacement and leaking pipe repair - 24 Smith Street" is much better.

This is especially important if you're invoicing a month or two after finishing the job (which you shouldn't be doing, but we'll tackle that another day).

Step 6: Add a Personal Touch

Xero lets you add a message to your invoices. Use this space wisely.

Good examples:

• "Thanks for your business. Payment is due within 14 days."
• "Great working with you on this project. Please pay within 7 days to avoid any late fees."

Not-so-good examples:

• "We really, really hope you'll pay this invoice because we're struggling at the moment and..." (too much information)
• Leaving it blank (missed opportunity)

Keep it friendly but professional. You're asking for money you've already earned, not begging for a favour.

CREATE DIFFERENT TEMPLATES FOR DIFFERENT SITUATIONS

Once you've got your main template sorted, you can create variations for different types of work:

• One for progress payments on big jobs (with milestone descriptions)
• One for regular monthly clients (like maintenance contracts)
• One for quick cash jobs where you want payment on the spot

Go to Settings > Branding Themes and click "New Branding Theme." Name it something obvious like "Progress Payment Template" so you can find it easily.

This saves you editing invoices every single time and reduces the chance of sending the wrong terms to the wrong customer.

THE REAL TEST IS WILL THIS INVOICE ACTUALLY GET PAID?

Before you save your template and start using it, ask yourself these questions:

• Is it immediately obvious who this invoice is from? (Logo or clear business name)
• Is it immediately obvious who it's for? (Customer name and contact details)
• Is it crystal clear what they're paying for? (Job description and breakdown)
• Is it crystal clear when payment is due? (Payment terms visible)
• Is it dead simple to make the payment? (Multiple payment options listed)
• Does it look professional enough that I'd pay it promptly if I received it?

If you can answer yes to all of those, you've got an invoice template that'll work for you instead of against you.

Good invoices aren't about being pushy. They're about being clear.
 

READY TO SORT YOUR INVOICES?

Set aside 30 minutes this week to set up your Xero invoice templates properly. Future you will thank you when the money starts hitting the bank account without you having to chase it.

And if you're looking at Xero thinking "I have no idea where half these settings are," that's exactly what Unexpected Bookkeeper is here for. Our course walks you through setting up Xero step-by-step, and our co-working sessions mean you can get your invoicing sorted while someone's right there to answer your questions.

About Northwest Accountancy and Profit First Accounting and Coaching

We operate virtually and in person. We have a local accounting team based in Karratha, WA. This flexibility means we can help business owners and property investors across Australia make smart tax decisions without the jargon or stress.
Real advice, real results.

Disclaimer: This information is general in nature and doesn't take your personal circumstances into account. Always seek professional advice for your specific situation.