Xero in on Xero: Using GoCardless with Xero

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General Ledger

We all know that getting paid by customers is vital for every business. There are many solutions available to process customer payments, but some are quite costly and not all integrate with Xero. Recently, GoCardless announced an ACH payment solution that integrates with Xero in the US with a maximum fee of $2.50 per transaction. I was excited to test them out with my own bookkeeping business. I was impressed with GoCardless every step of the way. 

Creating a GoCardless Account

Of course, the first step with any payment solution is getting set up as a merchant. Signing up was easy. They asked for just a few key pieces of information to get the account set up and asked for a minimal amount of documentation to verify my account. Within a couple of days, my account was set up and I was ready to start accepting payments!

Connecting GoCardless with Xero

Connecting GoCardless with my Xero account was also simple. A clear step by step path was outlined. Once my GoCardless account was set up, I was directed to a screen to allow GoCardless to connect to my Xero account:

When I clicked on Connect to Xero, I was directed to log in to my Xero account. Once I selected which Xero account to connect to I was ready to configure my Settings in Xero:

Next, I was prompted to select which bank account that the payments would be deposited to and what expense account to be used for the GoCardless fees.

There were a few more screens to go through that were explained well and did not take too much time to complete.

Customer Experience with GoCardless

I was happy that the merchant setup went well. But something that was more important to me was how the customer experience would be when I asked customers to pay us through GoCardless. Again, I was not disappointed!

When clicking on the Pay now button on the Xero-generated invoice email, our customer was invited to provide their basic payment details to set up the ACH Debit Authorization. Our customer was then asked to confirm the payment details and once confirmed they also received a confirmation that the direct debit was successful.

Two features that I especially like are that the ACH authorization form only needs to be completed once and your customer will be notified in advance before every payment is taken.

Receiving Payment and Account Reconciliation in Xero

I noticed that when I connected GoCardless with my Xero account, a new bank account named “GoCardless” was created. Once our customer completed the ACH authorization form, the related invoice in Xero was marked as paid and was reflected in the new “GoCardless” Xero bank account. A couple of days later, once the payment settled on the GoCardless side, the related fees and the related transfer to my bank account were automatically entered too.    

This is what the transactions look like in Xero:

Not only is GoCardless a good payment solution for one-off invoices, but it especially works well for repeating invoices and for future invoices for existing customers. Payments can be automatically processed without either you or your customer needing to enter the payment details after the initial authorization form has been completed. This means that GoCardless is well-suited for any type of business.

Overall, I was really happy with GoCardless. Setup was easy, the customer experience is very good, and best of all the related transactions automatically are entered into Xero! I feel the overall design of the screens compliments Xero very well and am excited to use this payment solution in the future.

Author Bio: Cindy Hovig is the Founder and Managing Director of Beyond Balanced Books Inc., a modern bookkeeping firm specializing in working with service-based businesses.  As an early adopter of cloud accounting, Cindy champions cloud accounting applications because she has seen them transform small businesses. Her firm, Beyond Balanced Books Inc. was awarded Xero Bookkeeping Partner of the Year in 2016 and received the Xero Partnership Impact award in 2017. Follow her on Twitter: @Bbbooksinc