Invoice Automation Software That Follows Up
Half of all US invoices are currently overdue. Invoice automation software handles the follow-up so the gap between "invoice sent" and "payment received" closes on its own. Here is how to pick the right tool.
Half of all US invoices are currently overdue, according to the Atradius 2024 report on US B2B payment practices cited by Clockify. Meanwhile, 38% of small business owners spend no time following up on past-due invoices at all. That gap between "invoice sent" and "payment received" is where invoice automation software fits in.
But the category is broader than most people realize. Some tools automate the invoices you receive (accounts payable). Others automate follow-up on invoices you send (accounts receivable). If you are a contractor or small business owner chasing late payments, you need the second kind.
The short answer
Invoice automation software for accounts receivable monitors your unpaid invoices and sends reminder sequences across email and SMS. QuickBooks caps at three email-only reminders. Dedicated AR tools like Chaser, Payt, and Nudge run multi-step sequences with escalation, multiple channels, and per-client controls.
Two Categories of Invoice Automation Software
FreshBooks breaks automated invoice processing into two camps: rules-based tools that ensure invoices follow specific workflows, and tools focused on capturing incoming invoices using OCR and manual data entry. Both categories deal primarily with accounts payable, helping companies process invoices they receive from vendors.
For small businesses that send invoices and wait for payment, the relevant category is accounts receivable automation. These tools monitor your outstanding invoices and send payment reminders on a schedule you define, escalating the tone and channel as invoices age.
The distinction matters because searching for "invoice automation software" returns a mix of both. AP tools like Rossum handle OCR extraction, purchase order matching, and approval routing. AR tools like Chaser, Payt, and Nudge handle the follow-up sequence after you have already sent the invoice.
What AR Automation Tools Do Differently
Accounts receivable automation software connects to your invoicing or accounting system, watches for unpaid invoices, and triggers a reminder sequence. The specifics vary by tool, but the core workflow looks like this:
Scheduled Reminders Across Channels
Rather than sending one email and hoping, these tools send reminders at intervals you configure. Chaser, for example, automates payment reminders via email, SMS, and phone. Their schema description claims the software can "reduce Days Sales Outstanding by 75% or more" and "save 15+ hours per week."
Escalation Over Time
A reminder sent 3 days after the due date should read differently from one sent at 45 days. Tools in this category let you adjust the tone and urgency at each stage of the sequence, so early reminders stay polite and later ones get direct.
Multiple Contact Methods
Email alone has limits. Payt's automated follow-up feature claims to deliver "30-50% faster payments" by combining channels. Their platform handles follow-up, payment plans, creditworthiness checks, and reconciliation from a single dashboard.
Comparing Follow-Up Capabilities
Not all invoice automation software handles follow-up the same way. Here is how the tools break down on the features that matter most for getting paid.
QuickBooks Online
QuickBooks lets you set up automatic invoice reminders, but caps at three reminder stages. All three are email-only. There is no SMS option, no phone call trigger, and no way to vary the message based on how overdue the invoice is. Every customer gets the same schedule regardless of their payment history. For businesses with a handful of reliable clients, three reminders might be enough. For anyone dealing with chronic late payers, it runs out of runway fast. See the full breakdown in our invoice reminder software comparison.
Chaser
Chaser is a UK-based accounts receivable platform founded in 2013. It automates invoice chasing across email, SMS, and phone. The platform integrates with accounting software to pull invoice data automatically. Chaser positions itself as a full credit control solution, adding features like payment portals and debtor management on top of the reminder sequence.
Payt
Payt is an accounts receivable management platform that scales from small volumes (up to 30 invoices per month) through enterprise (250 to 1,000,000+ invoices per month). Beyond automated follow-up, Payt includes an invoice portal where customers can view and respond to invoices, smart payment plans, creditworthiness checks, and AI-driven collections prioritization. It serves specific industries including law firms, accountancy, healthcare, and wholesale.
Nudge
Nudge runs a multi-step reminder sequence starting before the due date and continuing through 60 days overdue. Each step sends both SMS and email, with tone escalation built into the sequence. The approach treats every unpaid invoice as the start of a follow-up workflow rather than waiting for you to notice and act. More detail on how the sequence works is in our invoice reminder software guide.
What to Look for When Choosing
The tool comparison above covers the big names, but there are specific features that separate a useful automation from one that just moves the manual work around.
Channel Flexibility
Email-only reminders miss clients who do not check email regularly. US small businesses receive payment an average of 8.2 days after the agreed deadline, according to Clockify's compilation of late invoice statistics. SMS and phone follow-ups reach people where email does not.
Escalation Logic
A flat reminder schedule treats a 5-day-late invoice the same as a 50-day-late invoice. Look for tools that let you adjust message tone, frequency, and channel at each stage. The difference between a polite nudge and a final notice should be built into the software, not something you manage manually.
Integration With Your Invoicing Tool
If the automation cannot pull invoice data from whatever you currently use to send invoices, you will end up entering data twice. Most AR tools integrate with QuickBooks, Xero, or FreshBooks. Check compatibility before committing.
Volume Pricing
Payt structures its pricing by invoice volume, from up to 30 invoices per month through 1,000,000+. Other tools price per user or per feature tier. Match the pricing model to how your business actually works. A solo contractor sending 15 invoices a month has different needs than an agency sending 200.
Reporting and Visibility
Knowing which invoices are overdue is the baseline. Better tools show you which clients are chronically late, how your average collection time trends over months, and where in the sequence most payments arrive. That data shapes your payment terms and tells you which clients need different handling.
The Cost of Not Automating
The numbers from Clockify's late invoice statistics paint a clear picture. 14% of small to medium-sized businesses spend five or more hours per week chasing late payments. 25% of all bankruptcies happen due to late invoice payments. And 38% of small businesses fail because of financial challenges, with unpaid invoices as a contributing factor.
Five hours a week is 260 hours a year. For a contractor billing at $75 an hour, that is $19,500 in time spent on collection calls, reminder emails, and awkward conversations instead of billable work.
Invoice automation software does not guarantee every invoice gets paid on time. But it removes the gap between "this invoice is overdue" and "someone followed up on it." The follow-up happens whether you remember or not, whether you feel like having that conversation or not, and whether it is a Tuesday morning or a Saturday night.
Picking the Right Tool for Your Situation
Solo contractors and small teams should start with the follow-up sequence. How many steps does the tool allow? What channels does it support? Can you adjust the tone at each stage? Those three questions eliminate most of the noise.
If you already use QuickBooks and its three email reminders are genuinely enough for your client base, adding another tool may not be worth it. But if you find yourself manually emailing clients past the third reminder, or if clients regularly ignore email entirely, that is a sign the built-in automation has hit its ceiling. For a look at how to build a follow-up system around that, see our invoice payment reminders guide.
For teams managing higher invoice volumes, features like payment portals, creditworthiness checks, and collections prioritization start to matter. Payt and Chaser both offer these, though they target different scales and industries.
The question is whether your current process leaves money sitting in overdue invoices longer than it needs to. If the answer is yes, invoice automation software that handles follow-up is the fix, not a nicer invoice template or a more detailed payment terms clause.
READ MORE