Why should I use GoCardless and how does it work with Xero?
Why use GoCardless?
- It’s an efficient way of getting paid quicker
- It’s easy for your customers, as they don’t have to worry about paying you on time
- It’s cost effective – fees are just 1% per transaction, but capped at £2
- We have a referral link for you to sign up to Gocardless, giving you 3 months’ fee free transactions
- Funds are collected on your invoice due date
- Funds are deposited into your account within 5 days
- It links to Xero and tells it when invoices are paid, and even reconciles the payments received
- It has a handy dashboard telling you when funds are due in
How does GoCardless work?
So you’ve got your integration all set up for GoCardless to Xero, congratulations! And you’re starting to get clients and customers signing up to your Direct Debit mandate – Woohoo!
Let’s look at how the GoCardless for Xero integration works, as there is very little for you to do!
Before getting started, do have a look at our previous GoCardless blogs:
1. Get customers to accept the GoCardless Direct Debit mandate
You can do this in 2 ways:
- Manually send the customer mandate link from within your GoCardless Dashboard
- GoCardless automatically sends a mandate link when it sees a new customer in Xero
2. GoCardless collects payment on your invoice due date
- GoCardless automatically marks your invoice in Xero as paid via the Direct Debit account
- Payment will show in the Direct Debit account
- You don’t need to do anything.
3. GoCardless sends payment to your chosen bank account within 5 days
- You will see the amount in your bank account
- GC automatically creates a spend money transaction in the Direct Debit account for the transaction fees
- GC automatically makes the transfer in Xero from the Direct Debit account into your Bank account
4. All you have to do:
- Reconcile the transaction in your Bank account in Xero with the transfer from the Direct Debit account
- Manually “Mark as Reconciled” the transfer going out of the Direct Debit account
- All GC automatic entries show as “System Generated” in the history at the bottom of each transaction
And that’s all
This will save you so much time, and will put you back in control of your customer payments, as you will know when their payments will hit your bank account.
You will see the benefits in no time – cash in the bank quicker, and less time on your admin!
Thank you for reading!
Kinder Pocock are an approachable cloud-savvy firm of accountants based in Herefordshire but supporting businesses on the move.
We specialise in Security/Technology, Design and Indie Hospitality businesses.
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