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Xero and recurring payments: get paid on time

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJan 20233 min read

The way that businesses take payments from their customers is changing. From subscription models to progress invoices, more and more companies are choosing to regularly charge their customers for goods and services rather than taking larger, one-off payments.Recurring payments are a great way to ensure your business has a healthy cash flow, and Xero and GoCardless can help with this.

You might have heard of progress invoices, also known as repeating invoices, which involve requesting payment at regular intervals throughout a project. This may be at particular times, or when certain milestones have been met. This stands in contrast to billing in arrears, which requires taking a large payment from a customer after the project is completed.

Keep reading to find out more about recurring payments and how Xero and GoCardless can assist with these.

Recurring payments made simple

Recurring payments are fairly easy to understand – this just refers to situations in which you take regular payments from your customers. But what are the recurring payments benefits, and why do so many businesses choose to charge their customers in this way? The advantages include:

Saving time. With the right payment collection system, such as GoCardless, you can automatically collect payments rather than having to chase up your customers with invoices.
Better cash flow. When you take regular payments, you have more cash available to pay for overheads and materials, leaving your company in better financial health.
Improved customer loyalty, since customers tend to form closer relationships with subscription model businesses.
Guaranteed, on-time payments. When using GoCardless to collect direct debit payments, your funds will automatically be collected on the due date.

Take control of your recurring payments

There are a number of different ways that you can make the most of recurring payments to benefit your business. These include, but are not limited to:

Setting up subscription plans

Subscription plans are a great business model since they provide you with regular and reliable income. Not only does this protect your cash flow, but it’s also great for customers. Rather than having to shell out for a large lump sum, they are able to make smaller payments that feel more manageable, making them more likely to purchase from you.

Offer flexible payments

As well as taking recurring direct debit payments, you can also give your customers the chance to use flexible payments. This includes systems such as buy-now-pay-later, or payment in regular instalments (which is a kind of recurring payment). Flexible payments are a great way to increase your conversion rate and drive sales.

Secure online payments

Another important point is to offer your customers secure online recurring payments. Ensuring that your payment process is PCI DSS-compliant, as well as using a trusted payment service provider, will boost customer trust and conversion rate over the long term.

Collect from the UK, Eurozone, and Sweden

Of course, it’s also a great idea to build the functionality to accept payments not only from customers in the UK, but those based in the Eurozone and Sweden. The ability to collect international recurring payments from international customers should drive sales, as you won’t be limited to customers based solely in the UK.

How does Xero recurring payments work?

If you’re interested in taking recurring payments, then GoCardless and Xero can help you with this. There’s a fast and simple set-up process that you’ll need to do, and then after this you can sit back as your payments are automatically collected on their due date.

The process for using Xero with GoCardless involves the following steps:

Connect your Xero account to your GoCardless account

If you haven’t already, you’ll need to create a GoCardless account. You can then fill out the GoCardless for Xero online registration form, which will link your Direct Debit account. Following this, you should be able to see this account on your Xero dashboard.

Set up customers

You will then need to add your customers, either manually or automatically. You can send a registration form to them which will allow them to start making recurring direct debit payments. Following this, payments will be collected on the due date and come directly into Xero.

Payment reconciliation

After this initial set up, the hard work is done. All incoming payments and invoices will be automatically matched and reconciled without you having to lift a finger. You will be notified by GoCardless as this is done, and you can view records of the fee that is paid to Xero.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.