Xero and direct debit payment solution GoCardless have teamed up to launch an integration to help tackle late payments in Australia. Businesses can now accept direct debit payments through GoCardless for Xero, which is expected to improve payment times, and the transaction is automatically marked paid in Xero.
Late payments are a big issue for small business and hugely impacts how they make day-to-day decisions. Data from Xero Small Business Insights shows that in the month of April 2018, businesses with 30-day payment terms are waiting on average 36.3 days to get paid.
So what’s the effect of this mountain of debt on daily operations for small business? For starters, they must chase those late payments. This leads to a great deal of time and money wasted. In fact most small business owners spend up to five hours a week chasing late payers.
Benefits of direct debit for small business
While it often takes more than your 30 day invoice terms for a customer to pay an invoice, direct debit can ensure you get paid on time. With permission from the account holder, GoCardless for Xero can automatically debit money from a nominated account on an agreed day – like the invoice due date. It offers businesses of all sizes the benefits of direct debit.
It’s convenient, too. Customers don’t have to approve payments or remember to make payments, which simplifies their life. Co-founder of Mork Chocolate, Josefin Zernell, says that using the GoCardless for Xero has saved both the business and their customers time.
“GoCardless for Xero integration is seamless. Invoices are automatically reconciled, which showed us just how much time can be saved on payments admin – as well as improving our cash flow. We first used it in the UK and we jumped at the chance to introduce it to our customers here. It allows us to spend more time building relationships with our customers rather than focusing on the accounts.”
Traditionally direct debit is used for regular and recurring payments however the GoCardless for Xero integration offers a lot more flexibility. Through GoCardless for Xero a business can change the amount or frequency of a payment without needing additional authorisation. Making it a great solution for one-off and variable payments too.
GoCardless for Xero making payments painless
By encouraging customers to set up automatic payments by direct debit through GoCardless for Xero, businesses can ensure no more missed payments, keeping their cash flow in good shape.
Invoices are paid automatically with the transparent integration between GoCardless and their Xero account. This not only improves the overall cash flow within the business (removing any cash worries at expensive points in their business cycle), but can also make their whole financial admin process far more effective.
If you’re a Xero user and want to remove the hassle of late payment issues, using GoCardless for Xero is a no-brainer. With the simple integration, you can automate your entire payment and cash-collection process. Giving you time back to grow your business.