The Simple Way to Improve On-Time Invoice Payments in Xero

Every business loves getting paid. But chasing payments? Not so much. It’s the part of running a company that no one brags about on LinkedIn. Even with great accounting software like Xero, late invoices still sneak in, slowing cash flow and putting extra strain on finance teams. The scale of the problem is bigger than many realise: poor payment practices now cost the UK economy nearly £11 billion every year and cause around 38 businesses to shut down daily. 

The good news is that improving on-time payments doesn’t require a finance overhaul, messy admin, or awkward client conversations. There is a simple change possible inside Xero that makes a big difference: offering clients a straightforward, secure way to pay immediately.

Why invoices get paid late in the first place

A big part of the problem is friction. If a customer must dig out bank details, switch apps, set up a new payee, or type in long card numbers, the chances of them putting it off skyrocket. Add weekends, card failures, and forgotten reminders, and suddenly a 7-day invoice becomes a 37-day invoice.

Most delays aren’t intentional. They are the natural result of a payment process that isn’t designed to move at the speed business needs today.

The easiest improvement you can make in Xero

Pay by Bank is powered by open banking. It lets customers approve payment directly through their own banking app. No typing, no guesswork, no “can you resend that invoice.” It feels effortless for the client and brings cash into your business immediately. Payments land within seconds and automatically update inside your accounting system, so you can see cleared invoices instantly instead of refreshing bank portals every morning. Best of all, it works beautifully with the Xero workflow finance teams already use.

Flexible payment flows mean fewer excuses

Whether it’s a £90 invoice or a £9,000 project, customers want options. Pay by Bank supports:

• Full settlement on the spot

• Deposits before work begins

• Part payments over time

If a client can pay what they can now and return later to finish the balance, invoices jump to the front of their priority list. And with reminders linked to the same secure payment flow, follow-ups feel more like help than a hassle.

Immediate visibility keeps finance teams sane

Businesses no longer need to worry about mystery money or wait three days for a card payout. With instant settlement and synced payment status, reconciliation becomes quick and reliable. Time spent chasing payments drops, freeing finance teams to focus on planning and growth rather than debt collection.

A real improvement in cash flow without changing how you work

The smartest part is that you do not need to change your practice management or invoicing processes. Your team still sends invoices the same way. Your customers simply get a better button to press. When paying becomes as simple as approving a banking notification, invoices stop ageing. Cash keeps moving. Relationships stay positive. And everyone can spend less time chasing and more time celebrating money arriving when it should.

Make on-time payment the default

Late payments shouldn’t be a “cost of doing business”. With Pay by Bank inside Xero, on-time settlement can finally become the norm instead of the exception. Faster payments mean clearer cash flow, less admin pressure, and fewer uncomfortable reminders. Modernising how you get paid doesn’t need to be complicated. If you are ready to make invoice day feel less like a waiting game, a quick switch to instant bank payments is all it takes.

Book a quick demo with Atoa to see how Pay by Bank inside Xero can bring the money in on time, every time, without changing how you work.