The problem
Bureau fees change every month with the number of payslips, so clients can't set up a standing order and pay by transfer when they remember. If 30 clients are billed monthly, 10 pay late and each chase takes 20 minutes, that's 200 minutes, plus 2 minutes matching each payment, about 4.3 hours a month.
What the AI does
GoCardless for Xero collects payments for your Xero invoices automatically from the client's bank account on the due date, by Direct Debit, so a different amount each month is no problem. The client sets it up once by clicking 'Pay now' on an invoice. When a payment arrives, Xero marks the invoice paid and reconciles it, recording the GoCardless fee as an expense.
A worked example
A payroll bureau in Stockport invoices 30 clients from Xero each month, averaging $120£90€107A$173C$169 depending on payslip count. It asks every client to set up a Direct Debit from their next invoice.
Before
10 late payments chased at 20 minutes, and 30 payments matched by hand: about 4.3 hours a month
After
About 1 failed payment chased a month and reconciliation handled in Xero: 20 minutes a month
What it's worth
About $160£120€143A$230C$226 a month in staff time, against about $44£33€39A$63C$62 a month in GoCardless fees. That is 240 minutes saved (200 minutes of chasing down to 20, plus 60 minutes of matching) or 4 hours, at an assumed $40£30€36A$58C$56 an hour. On the Standard plan each $120£90€107A$173C$169 payment costs 1% + 20p, $1.46£1.10€1.31A$2.11C$2.07, so 30 payments is $44£33€39A$63C$62 a month, excluding VAT. This assumes the bureau already invoices from Xero.
How to set it up
- Open a GoCardless account and connect it to your Xero organization.
- Write to clients explaining that the monthly invoice will be collected by Direct Debit on its due date, and update your terms.
- Add GoCardless as a payment option on the invoices so each client can set up the mandate from 'Pay now'.
- Set up the second bank account in Xero that GoCardless needs for reconciliation.
- Check the failed payments list each month and phone those clients.
What goes wrong
- Fees are per payment: 1% + 20p on Standard, capped at $5£4€5A$8C$8. Tiny invoices cost proportionally more, and Advanced and Pro cost more again.
- Send invoices in good time before the due date so clients can query a payslip count before the money goes.
- Payments set up outside the Xero integration aren't reconciled automatically.
- A client can cancel the mandate at their bank. It shows up as a failed payment, so check the list monthly.