Late interest plus early-pay discounts

> Cost: Paid. Paidnice Essentials is $69/month (monthly, no contract). First 20 actions free.

Honest note: rules automation, not AI. This is a Paidnice-published story told by the bookkeeper, with no exact figures: a "six-figure" overdue balance "more than halved" within months. The idea is sound for any business with chronic late payers, a stick (interest) and a carrot (an early-payment discount), but interest has to be allowed by your terms and local law. Check with your accountant first.

Prerequisites

• A Xero organisation with your customer invoices in it (Paidnice also works with QuickBooks Online).
• Admin access to Xero so you can approve the connection.
• Your payment terms, and any late-fee wording, already in your invoices or contracts. Late fees need a legal basis, so check with your accountant.
• Customers' email addresses (and mobile numbers if you want SMS) in Xero.
• If you're a bookkeeper setting this up for a client: the client's written OK and access to their Xero.

Step-by-step setup

Step 1. Connect the Xero organisation. Sign up at paidnice.com, click Xero and approve. Customers start in the Default Group.

Step 2. Split customers into groups. For example "Good payers", "Chronic late payers" and "Do not contact". On the Contacts tab, tick customers and use Move Contacts to Group. A group with no policies (call it "Whitelist") acts as a do-not-contact list.

Step 3. Add interest on overdue invoices. In the late-payers group choose Add new policy → Invoice Late Charge and pick annualized interest (or a fixed fee or percentage). Set a grace period, choose recurring, and decide whether it's added to the invoice or raised as a new invoice.

Step 4. Add an early-payment discount. In the good-payers group, add a Prompt Payment Discount Policy. Choose which invoices qualify (by default, those issued in the last 2 days), a fixed amount or percentage, how many days before the due date it expires, and the account it posts to. Optionally attach a discount email template. It isn't retroactive: use process now for existing invoices. Check one in the invoice's Preview Policies tab.

Step 5. Warn customers in reminders. Add Add New Automation Policy → Email reminders that mention the discount before the due date and the coming interest after it. Send them on weekdays at a sensible Action time.

Step 6. Add monthly statements. Add a Statement policy (outstanding items, monthly) so customers see everything they owe in one place, with a pay link.

Step 7. Test, then activate. Run everything on a test contact, check the wording and amounts, then switch policies to Active.

Easier: let your AI do it

On the Pro plan (from $99/month) Paidnice has an official MCP server. That's a secure plug that lets an AI chat such as Claude or ChatGPT read your Paidnice data.

1. In Paidnice, go to Settings → Advanced → API & MCP → Connect an agent (MCP) and copy the address https://api.paidnice.com/mcp.
2. In Claude, open Customize → Connectors, click +, then Add custom connector. Name it Paidnice, paste the address and click Add (Claude's free plan allows one custom connector). ChatGPT needs a paid plan with developer mode turned on.
3. Sign in to Paidnice when asked, pick your organisation, and choose Read (safest) or Read and Write.

Today it can read customer replies, contacts and invoices, and update contact people. Sending reminders and building policies by chat are still in beta. Try: "Which customers replied to reminders this week, and what did they say?" You can revoke access any time under API & MCP.

What success looks like

The overdue balance drops month by month. More invoices are paid before the due date, and some customers call to settle before interest kicks in.

Common issues & fixes

• Discount didn't appear on an older invoice: discounts aren't retroactive. Use process now.
• A key customer complains about interest: remove it under Completed Actions → Remove late fee, and move them to another group.
• Duplicate reminders: turn off Xero's own reminders.

Optional: Maintenance

• Monthly: compare the overdue balance with last month.
• Quarterly: review who sits in each group.

Copy-paste prompt

I'm a bookkeeper setting up automated collections for a client who invoices on [NUMBER]-day terms. Their terms allow interest of [RATE] on overdue invoices: [PASTE CLAUSE].
Write:
1. A short notice to all customers announcing a [X]% discount for payment within [Y] days and interest on overdue invoices from [DATE] (under 120 words, friendly).
2. A reminder email for 2 days before the due date that mentions the discount.
3. An overdue email that mentions the interest will start in [NUMBER] days.
Don't give legal advice; flag anything to check.

Sources

• Case: Paidnice success story (Australian bookkeeping firm for a client). Credit: the bookkeeper (vendor-published).
• Paidnice Help: Quick start
• Paidnice Help: Late fees and interest
• Paidnice Help: Prompt payment discounts
• Paidnice Help: Using tags and groups
• Paidnice Help: Sending email reminders (advanced)
• Paidnice: AI agents (MCP)
• Paidnice pricing