This article explains how GoCardless works in Xero
Once configured GoCardless allows you to set up direct debits and collect payments for your Xero invoices automatically. You can also get authorisation from your customers to automatically collect payments for all future dated, approved invoices.
How it works in your Xero organisation
- Once configured GoCardless allows your clients to either Pay Now using a credit card or bank transfer. It also allows them to elect to make Direct Debit payments on the due date of the invoice.
- For Direct Debits GoCardless will :
- Deduct the invoice amount from the Client's nominated bank account on the due date of the invoice.
- GoCardless will record the payment on your Xero invoice on the due date, but it can take a few days for GoCardless to transfer the payment to your bank account.
- The payment is automatically reconciled in your GoCardless clearing account when payment is received.
- A transfer transaction is created when the payment arrives in your bank account in Xero (which could take a few days).
- Xero records the GoCardless fee as an expense at the same time.
- You can cancel a scheduled GoCardless payment by removing GoCardless from the invoice, and applying a different invoice template.
- For Pay Now payments GoCardless will:
- Process the payment from the client immediately, however, it may be a few days before you receive the funds in your bank account, and Xero may not record the funds until the next day's bank feed
- GoCardless will record the payment on your Xero invoice on the payment date, but it can take a few days for GoCardless to transfer the payment to your bank account.
- The payment is automatically reconciled in your GoCardless clearing account when payment is received.
- A transfer transaction is created when the payment arrives in your bank account in Xero (which could take a few days).
- Xero records the GoCardless fee as an expense at the same time.
If you have questions about how GoCardless works, or need to get it set up, please contact your Bookkeeper and they will help you out.
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