The problem
Courier account customers often pay 30 days late, while fuel and van finance leave the bank every week. If a courier bills 20 small business accounts about $333£250€298A$480C$470 a month each and the owner spends 4 hours a month chasing late payers by phone and email, that's half a working day lost every month, with cash short in between.
What the AI does
GoCardless collects payments straight from customers' bank accounts by Direct Debit. Its pricing page lists the Standard plan at 1% + 20p per UK transaction, capped at $5£4€5A$8C$8 with no setup costs; prices exclude VAT. Xero's invoicing page says it connects with GoCardless so customers can pay by Direct Debit. Each account customer signs a mandate once; after that, the monthly invoice you raise in Xero is collected on its due date and you only deal with the ones that fail. Advanced and Pro add automatic retrying of failed payments.
A worked example
A three-van courier in Northampton has 20 account customers, from print shops to a dental lab, each invoiced about $333£250€298A$480C$470 at month end. The courier already uses Xero for invoicing.
Before
About 4 hours a month chasing late payers, and money arriving anywhere up to 60 days after delivery
After
Most accounts collected on the due date by Direct Debit; about 1 hour a month dealing with failures and the few who won't sign up
What it's worth
About $100£75€89A$144C$141 a month saved in chasing time, against about $72£54€64A$104C$102 in GoCardless fees. Three fewer hours a month at an assumed $33£25€30A$48C$47 an hour is $100£75€89A$144C$141. Fees on 20 collections of $333£250€298A$480C$470 are 20 x ($3.33£2.50€2.97A$4.80C$4.70 + 20p) = $72£54€64A$104C$102 a month on Standard, excluding VAT. Xero is assumed already in use; the steadier cash flow isn't counted.
How to set it up
- Connect GoCardless to your Xero account, following the setup steps on either site.
- Write to each account customer explaining that invoices will be collected by Direct Debit on the due date, and send them the mandate link.
- Update your account terms to say payment is by Direct Debit, with the date collections are taken.
- Keep sending the invoice with the delivery list each month, so customers can check it before the collection.
- Check failed payments each week and ring those customers the same day.
What goes wrong
- Some larger businesses won't sign Direct Debit mandates for suppliers. Keep Xero's invoice reminders running for them.
- On Standard, a failed payment isn't retried automatically; that needs Advanced (1.25% + 20p, capped at $7£5€6A$10C$9).
- Fees are per payment, so splitting a customer into weekly collections quadruples the 20p part.
- Disputed deliveries become Direct Debit indemnity claims if you collect before sorting them out. Settle disputes before the collection date.