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Control your business cash flow using bank payments within Xero


Aug 31, 2022

Wouldn’t it be great if you had more control over when your customers paid you? Think of all the admin you could avoid, the countless hours saved. It’d be great for your stress levels too, with less worrying about whether you can cover your overheads for the month and none of those awkward phone calls to chase overdue invoices. 

The good news is you can control when your customers pay you, with bank payments powered by GoCardless.

You’re not alone in waiting to get paid

Most businesses have experienced the pain of late payments.. Not only is this a strain on cash flow, but also a source of significant stress; 58 percent of small business owners believe that late payments are putting their business at risk1

So why does this happen? A key reason is that most invoices tend to be paid by manual wire transfer or checks. This puts the control of when payment is made with the customer, not the business owner. It relies on the customer finding the time to complete this manual task.

Late payment isn’t a one-time issue

Recurring revenue business models can range from regular billing such as subscriptions, retainers and instalments, to invoicing the same customers multiple times over the year. Recurring billing models are growing fast, driven by a rise in subscription-based services, plus the shift to online billing amplified by the global pandemic. Even if you have a set of customers who pay you throughout the year, but amounts always differ, you still have a recurring business model.

Many of the bills generated in invoicing or accounting software like Xero are recurring. When you have a recurring revenue business model and late paying customers, this can quickly snowball into a serious cash flow problem.

Three reasons to use bank payments

1. End late payments and stop chasing customers

By using bank payments powered by GoCardless, the whole process is taken care of automatically. That means you can be confident about your cash flow and covering your business expenses.

Using bank payments also means you don’t have to deal with the hassle of chasing customers for payment. It’s been reported that businesses get paid 47% faster with GoCardless.

2. Automate your manual processes and save time

The secret to running a successful recurring revenue business is automating your billing process. Use Xero to automate sending invoices, and GoCardless will automatically collect payment for them when the bill is due.

GoCardless users spend 90% less time managing payments than small businesses who manually collect and manage payments. 

3. Reduce the cost and stress of taking payments

Bank payments cut out the costs of card networks, making for a more cost efficient way to get paid. And by getting paid on time automatically, you also reduce the costs involved in chasing and managing payments. 

The solution to late payment

Collecting payments doesn’t need to be painful. Most of the issues that businesses face around recurring revenue and late payment can be solved by offering your customers an easy, safe and hassle-free way to pay on time. 

Setting up a customer to pay by GoCardless is easy. You just send the link to your customer from your Xero account. They then securely enter their payment details online, authorising you to collect payments from their bank account and “hey presto!”. They only need to do this once and then they’re all set to send payments without either of you having to lift a finger.

GoCardless allows you to collect recurring payments automatically. Then when your Xero invoices are due, GoCardless reminds your customer in advance that a payment is due before automatically pulling the payment from your customer’s bank account to send to yours. This removes much of the admin associated with other payment methods, making it a hassle-free way to control your cash flow.


1 Source: Federation of Small Businesses

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