The problem
A small 3PL bills clients after the work is done and can be left holding a client's stock while the invoice sits unpaid. With 8 clients on monthly invoices averaging $2,394£1,800€2,142A$3,456C$3,384 a couple paying 3 weeks late leaves thousands outstanding, and the owner spends about 3 hours a month chasing.
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 plus 0.3% on Direct Debits over $2,660£2,000€2,380A$3,840C$3,760; prices exclude VAT. Xero's invoicing page says it connects with GoCardless so customers can pay by Direct Debit. Each client signs a mandate when they join, and the monthly invoice is collected on its due date even though the amount changes each month.
A worked example
A fulfillment warehouse in Swindon with 8 e-commerce clients, invoiced at month end from Xero for storage, picks and postage, averaging about $2,394£1,800€2,142A$3,456C$3,384 each.
Before
About 3 hours a month chasing, with 2 clients usually paying 2 to 3 weeks late
After
Invoices collected on the due date; about 30 minutes a month dealing with any failed payments
What it's worth
About $84£63€75A$121C$118 a month saved in chasing time, against about $43£32€38A$61C$60 in GoCardless fees. That's 2.5 hours a month at an assumed $33£25€30A$48C$47 an hour. Each $2,394£1,800€2,142A$3,456C$3,384 collection hits the $5£4€5A$8C$8 cap on Standard, so 8 clients cost 8 x $5£4€5A$8C$8 = $43£32€38A$61C$60 a month, excluding VAT; an invoice over $2,660£2,000€2,380A$3,840C$3,760 adds 0.3% on top. Xero is assumed already in use, and the value of cash arriving on time isn't counted.
How to set it up
- Connect GoCardless to Xero.
- Put Direct Debit payment into your client agreement, with the collection date and how disputes are handled.
- Send each existing client the mandate link with a short note, and make it part of onboarding for new ones.
- Send the invoice and activity report a few days before collection so clients can query it.
- Check failed payments weekly and agree with each client what happens to dispatches if a payment fails.
What goes wrong
- Variable invoices surprise clients. Always send the invoice and activity report before the collection date.
- Peak months can push invoices over $2,660£2,000€2,380A$3,840C$3,760 adding 0.3% on the amount, so fees rise when you're busiest.
- On Standard, failed payments aren't retried automatically; that needs Advanced or Pro.
- Your right to hold a client's stock for unpaid fees depends on your terms. Get your client agreement checked rather than relying on Direct Debit alone.