Collect payments the easy way: GoCardless and Xero

Collect payments the easy way: GoCardless and Xero 150 150 Purple Lime

As a business, one of your primary objectives is to make money. But without getting paid, that’s pretty difficult to do. And even though invoices may be raised, some customers will always pay late, or some will try to avoid paying altogether. This leaves you writing emails and making phone calls to chase your customers for payments and takes you away from all the other things you could be doing to grow your own business.

But what if it didn’t have to be that way? What if there was a way you could ensure your clients paid their invoices on the due date, every time, without having to do lots of chasing? It sounds too good to be true – but it’s not. All you need is GoCardless, and its integration with Xero.

What is GoCardless?

GoCardless is a software company that collects direct debit payments for businesses all over the world. Established in 2011, they’ve become a global leader in account-to-account payments and have revolutionised the process of getting paid for many businesses large and small. While they may have started small, businesses quickly realised the benefits of the model and their popularity skyrocketed. Their service is now currently used by over 600,000 businesses across the globe.

On top of making getting paid the easiest thing in the world, GoCardless have made their reputation on their fee structure. Their packages start at just 1% + 20p per transaction, and have a cap of £4 per transaction, so you’re never paying a fortune just to get paid. It also integrates seamlessly with almost all major bookkeeping software including Xero.

How does it work?

GoCardless works by connecting your bank to your customer’s bank via their service. This allows GoCardless to collect money directly from your client’s bank account on the day the invoice is due, and deposit it into yours. All automatically. Once you have it set up and integrated with Xero, GoCardless can see an invoice has been raised, recognise the due date, and arrange collection on that date. It also sends out a reminder to your client via email 3 days before the payment is taken, so they can make sure they have enough in their account to cover it. The whole purpose of GoCardless is to make payments a background activity for both you and your client, so you can focus on other things in your business.

Does it integrate with Xero?

Yes! Xero as a platform is designed to be easy to use and easy to integrate. Their marketplace features literally thousands of apps that have been designed to integrate seamlessly with Xero, making your life a little easier each time. GoCardless is one of those apps, so getting it set up and running is one of the simplest things in the world. Here is how it works:

  • Sign up – Sign up to GoCardless and select your account type.
  • Register – Complete the GoCardless of Xero online registration form. Once you do this a direct debit account will turn up on your Xero dashboard, and as soon as it does, you will be all set to receive payments.
  • Set up customers – You can set up customers on GoCardless automatically, or you can do it manually if you prefer. It is as simple as sending your customers a request to fill in the online registration form so that they can pay by direct debit.

Once you have GoCardless all integrated with Xero and your customers set up, it is time to start receiving payments.

  • Collecting payments – Payments will be collected direct from your customers bank on the invoice due date and come directly into your bank, and Xero. So no more waiting and chasing for payments! Customers are notified 3 days before the payment is due, so they can ensure they have enough funds to cover your invoice.
  • Automated reconciliation – Because GoCardless is integrated with Xero, it can recognise payments and who they belong to. Once you have customers set up and payments coming in, Xero will be able to reconcile everything automatically. You will not have to lift a finger. And the fee for GoCardless? It will also be automatically reconciled with Xero.

Why should I use it?

Of course, like every new investment you make, you should understand why it is good for your business. Sometimes this takes a lot of research, but with GoCardless it is almost a no-brainer. It is the best way to ensure you get regular payments from your clients, without all the hassle. Some of the headline benefits to your business include:

Predictable cash flow: Knowing who is going to pay you and when is critical in keeping your business afloat financially. But if left to their own devices many clients simply won’t play ball. Late payments and non-payment is a significant problem for small business owners, and it can really put a dent in your cash flow. By using GoCardless you can bypass all of that, and payment can be taken directly from your client’s bank account on the invoice due date. So you know exactly what’s coming in and when – and have confidence that it will actually appear.

No payment chasing: The average small business owner loses around half an hour every day to chasing unpaid and overdue invoices. That adds up to a lot of time lost over the months, not to mention the stress of constantly asking clients to pay what they owe you. Taking that task away gives you a lot of time back in your day, as well as less stress, so you can be more productive.

Better client relationships: No one enjoys being chased for money, and you probably do not enjoy doing it either. If this is a regular thing, then both you and the client could start getting tired of it, and the relationship could sour. GoCardless removes the need for the client to remember to pay you, and the need for you to chase. This means you can focus on developing those relationships in a positive way. This is just one of the reasons business owners and their customers love GoCardless.

 At Purple Lime, we love anything that can make our clients’ lives a little easier. It is one of the reasons we love automation so much. GoCardless can help you streamline the way you run your business, stabilise your cash flow and make bookkeeping a much simpler task at the same time. When you need support, the team at Purple Lime are on hand to help you get signed up and set everything else up for you, so you don’t have to do anything but sit back and enjoy that extra half hour a day the process will save you. If you would like to know more, please get in touch by emailing or calling us on 01249 263 333.