How to account for outgoing payments to other GoCardless users (GoCardless for Xero)
GoCardless for Xero enables businesses to collect & reconcile payments in a more streamlined way. However, in some instances, businesses also pay their suppliers via GoCardless and accounting for different expenses in Xero can be confusing based on the information on the transaction.
As we want to take the pain away from the process of using GoCardless, both as a business and as a customer, we have put together this guide that will help you reconcile payments collected via GoCardless.
Please note: This only applies to customers not using the Merchant Name on Payer Bank Statements add-on, as for customers using the Merchant Name on Payer Bank Statements, the name of the organisation you’re paying is displayed on your bank statement directly.
Scenarios:
| Scenario | Suggested Solution |
|---|---|
|
If there is a Direct Debit mandate reference displayed on your bank statement/in your bank feed |
If your bank statement shows the mandate reference for the payment, you can create a bank rule in Xero to pick up on this reference and allocate the payments correctly. This way, payments collected under that same Direct Debit mandate will be attributed to that particular category selected in your bank rule. |
|
If the Direct Debit mandate reference is not displayed on your bank statement but the payment amount is the same for each payment to the same organisation |
If the amount that you are being charged is fixed, you could create a bank rule in Xero for the specific amount you are being charged. Please note that if you are paying different suppliers the same fixed amount, this method would not be suitable. |
|
If the Direct Debit mandate reference is not displayed on your bank statement and the payment amounts vary |
All payments collected via GoCardless are submitted against a unique mandate reference. However, unfortunately, some banks don't display this information on their bank statements. |
For more information on how to create bank rules in Xero, click here.