For reconciliation to work between GoCardless and Xero, you need to have two bank accounts in Xero.
The reason for this is that GoCardless charges a fee on all successful transactions, which is taken from the payouts you receive from your customers. This means that the net amount received against any individual invoice is not equal to the total amount due on each invoice, and the fees that GoCardless have taken need to be recorded on your accounts. Using a clearing account enables both to be reconciled.
We post a payment for the full invoice amount into the clearing account. Then on the day you receive payouts from GoCardless (which could include multiple payouts from customers) we will:
- Post GoCardless fees against your nominated fee account
- Transfer the payout (net of fees) into your current account
This ensures that your clearing account has all the correct transactions and reconciling your current account is as simple as marketing one transaction against each transfer, instead of having to mark multiple individual invoices and fees.
Screenshot shows the Direct Debit bank account
In this example we have received two invoice payments. One for A$900.00 and one for A$70.00. The total fees for the payout were A$2.70 that have been allocated to our Bank Fees account and into our Current Account we have received A$967.30.
On your Current Account reconciliation page, once your bank feeds have imported, your receipt from GoCardless should auto match for reconciliation against the transfer we created from the Direct Debit account.
Screenshot shows the Reconcile screen of your Current Account
The only part of the reconciliation process that we cannot yet automate, is the final reconciliation of the transfer out of the Direct Debit account. When viewing the Direct Debit Account Transactions page, you will see the transfer as unreconciled.
Screenshot above shows the unreconciled transfer transaction in the Direct Debit account
In order to reconcile this, you must click into the transaction, and then click Options (top right of the transaction details) and then choose 'Mark as Reconciled'.
Screenshot shows the 'Mark as Reconciled' option within the Options menu