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GoCardless: setting up the integration

A guide to setting up the integration between FreeAgent and GoCardless so you can take online payments from your customers.

GoCardless is an online payment service that can integrate with your FreeAgent account to allow you to take online payments from your customers. GoCardless works by taking Direct Debits from your customer’s bank account, charging you 1% of the transaction value, up to a maximum £2.00. Here’s how to set up the GoCardless integration.

Step 1: Enable GoCardless

Begin by selecting ‘Settings’ from the drop-down menu at the top-right hand side of the screen.

overview to settings

From there, select ‘GoCardless’ from the integration options.

Select ‘Enable GoCardless’ from the GoCardless welcome screen in FreeAgent.

enabling GoCardless

Step 2: Sign in to GoCardless or create your GoCardless Account

If you've never used GoCardless before, you can create a new account here then sign in. If you already have a GoCardless account, simply sign in to connect your GoCardless account to FreeAgent.

GoCardless setup screen

Once you’re signed in, you can confirm the connection between FreeAgent and GoCardless. This will enable the integration.

GoCardless integration with FreeAgent accounting software

Once you’ve set up the integration, your customers can authorise a Direct Debit mandate, which will allow you to take payments automatically (up to £5,000 per invoice). If you need to increase this, contact GoCardless directly.

Step 3: Auto-reconciling invoices

Once you’ve enabled the GoCardless integration, you can set FreeAgent to automatically mark invoices as paid when GoCardless pays the money into your bank account. This will also automatically reconcile the fees that GoCardless issues to you each time you use the service. To enable this, go to the Settings > GoCardless page and select the bank account where the funds will be paid into.

enabling GoCardless auto reconciliation

When integration is enabled, FreeAgent will automatically create a new ‘GoCardless Account’ bank account in FreeAgent. This is different from normal bank accounts in FreeAgent, in that it’s solely used to record the details of invoice payments and refunds from GoCardless.

How the GoCardless bank account works

When a customer makes a payment to you through GoCardless, FreeAgent will create a transaction in your ‘GoCardless Account’.

Any GoCardless payments for FreeAgent invoices will be automatically explained against their matching invoice.

If there are payments that come into your GoCardless account for any invoices you’ve sent outside FreeAgent, or any work not recorded in FreeAgent, these transactions will be created in the ‘GoCardless Account’ (the GoCardless bank account in FreeAgent) but will remain unexplained. You can then explain these manually.

FreeAgent then auto-explains the GoCardless fees for all these transactions, both the automatically and manually explained ones, and creates a transfer transaction between the ‘GoCardless Account’ and the bank account you selected when you enabled the auto-reconciliation. This is for the full amount paid into your bank account through GoCardless, and not just the payments for FreeAgent invoices.

When you import the transactions into your bank account (by bank feed or statement upload), you then just need to match the manual transfer with the corresponding transaction.

What should I do if any of my GoCardless payments are personal?

If any of the transactions that come through your GoCardless account are personal, rather than business related, you’ll still need to explain them in your FreeAgent account.

To do this, select the type ‘Money Received from User’, choosing yourself as the user that the money has been received from.

If your business is a limited company, you then need to choose ‘Payment to Director Loan Account’ as the reason, and enter your own description. 

screenshot of explaining personal transaction for limited company

If you’re a sole trader or are in a partnership, you should choose ‘Capital Introduced’ as the reason instead.

screenshot of explaining personal transaction for sole trader

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