Take payments with GoCardless using a Direct Debit mandate

This article explains how to start accepting Direct Debit payments for your FreeAgent invoices using GoCardless.

Once you’ve set up the integration between FreeAgent and GoCardless, you’ll need to set up a Direct Debit mandate with your customer to allow you to automatically collect payments.

You can also use GoCardless to take instant bank payments, collect invoice payments online using Tyl by NatWest, Stripe or PayPal. Find out more about payment solutions in FreeAgent.

1. Set up a new Direct Debit mandate

You’ll first need to ensure that your customer is added to FreeAgent as a contact.

Once this has been done, navigate to the customer’s page in the Contacts area of FreeAgent and select 'Direct Debit mandate' from the ‘Add new’ drop-down menu.

Complete the information for the Direct Debit mandate request. Remember that the mandate covers all payments for this customer, rather than one project in particular. When you’ve completed all the details, select ‘Send Request’.

The customer will then receive an email with the details of the Direct Debit mandate for them to authorise. Please note that the mandate link will expire once it has been clicked, so the customer will need to action the mandate at the time the link is used when they first open the email.

Setting up a Direct Debit mandate for multiple signatories

Some customers may require more than one person to authorise a Direct Debit mandate on their bank account. If this is the case, the customer should follow the link on the email they receive with details of the Direct Debit mandate and then untick the ‘I can authorise Direct Debits on this account myself’ option and select 'Set up this Direct Debit'.

The customer will then receive an email that includes a mandate document that they can print and sign. Once all necessary signatories have signed the mandate, the customer will then need to upload the mandate document via the link provided in the email to complete the Direct Debit authorisation.

Please note that the mandate will not be submitted to the customer’s bank until the customer has completed and uploaded the paper mandate document.

While you wait for the customer to authorise the mandate, the Direct Debit mandate panel of the customer’s page in the Contacts area will display ‘Authorisation Pending’.

If the customer doesn’t fully complete the mandate setup process and their link expires, you can select ‘Cancel Request’ in the ‘Direct Debit mandate’ panel. Once cancelled, you can follow the steps to set up a Direct Debit mandate with the customer.

2. Take payment using the Direct Debit mandate

When you create an invoice for a one-off payment, or a recurring invoice profile for repeat customers, select the 'GoCardless' checkbox in the 'Payments' section. If you’d like GoCardless to be selected by default when creating future invoices, find out how to set up default payment options.

Next, select whether you want the payment to be taken on the invoice date, the payment due date or manually.

Payments taken on the invoice date

If you choose to take the Direct Debit payment ‘On invoice date’, the Direct Debit process will be initiated on the invoice date once the invoice is marked as sent, or sent automatically.

If the invoice is dated today or a date in the past, the Direct Debit process will be initiated immediately. If the invoice is dated in the future, it can take up to 10 days to complete if it’s the first Direct Debit taken from the customer. Otherwise, it can take three days.

For example, if the invoice is dated 31st May 2024 and you select ‘On invoice date’, the payment will be collected on that date. However, the payment may not appear in GoCardless and FreeAgent until a couple of days after.

Payments taken on the payment due date

If you choose to take the Direct Debit payment ‘On payment due date’, the Direct Debit process will be scheduled to begin once the invoice is marked as sent or sent automatically, to allow the payment to be taken when the invoice is due to be paid.

Please note that the payment can take up to 10 days to be completed if it’s the first Direct Debit taken from the customer, so the payment may be received after the due date. The invoice will also be locked for editing during this time unless the Direct Debit payment is cancelled via GoCardless.

For example, if the invoice is dated 31st May 2024 with a payment terms of 30 days, if you select ‘On payment due date’, the payment will be collected on 30th June 2024. However, the payment may not appear in GoCardless and FreeAgent until a couple of days after.

Payments taken manually

If you choose to take the Direct Debit payment ‘When manually triggered’, you’ll need to initiate the Direct Debit process manually once the invoice has been marked as sent or sent automatically, by selecting the ‘Take payment now’ button.

For example, if you select the ‘Take payment now’ button on 31st May 2024, the payment will be collected on that date. However, the payment may not appear in GoCardless and FreeAgent until a couple of days after.

Once you’ve entered all the relevant details for the invoice, select ‘Mark as Sent’, or if you’ve chosen to automatically email the invoice, select ‘Send Now’.

If you’re marking the invoice as sent in FreeAgent, select ‘Mark as sent’ in the pop-up window to complete the process.

What happens next?

The ‘GoCardless payment status’ panel on the invoice will indicate when the payment is scheduled to be taken.

Whether you’re taking payment for a single or recurring invoice, GoCardless will notify the customer that the payment has been taken. You should receive the payment from GoCardless within ten days. During that time, your invoice will show a payment status of ‘Payment pending’.

In the event that the payment fails you will see a ‘Payment failed’ status.

In this instance your customer hasn’t been charged. If you have Success+ enabled in your GoCardless account (only available to certain subscription levels), the payment will be retried  automatically. If you don’t have Success+ enabled in your GoCardless account, you’ll need to select ‘Retry payment’, which can be attempted three times. If the payment fails for a fourth time, you’ll need to get back in touch with the customer to ask them to attempt the payment using another method.

While payments are pending or being processed, FreeAgent will stop sending late payment reminders.

What to do when a customer wants to change their bank details

You can only have one active mandate per customer. Therefore, if a customer wants or needs to change their bank details, you'll need to cancel the existing mandate and set up a new one.

Please note that any payments that are currently processing payments may still be attempted, so please do check any open invoices that may be still processing the payment before cancelling the mandate. You may wish to speak with your customer regarding this so that they know what to expect in regard to attempted payments.

To cancel an existing mandate in FreeAgent, navigate to the customer's contact profile and select 'Remove mandate'.

Once the mandate is cancelled, you can set up a new one. 

Partial payment for a credit note issued or previous overpayment received

In situations where a partial credit note is issued or a previous overpayment is to be applied against the current invoice, you will first need to reduce the invoice amount by that of the credit note or the overpayment, before sending the invoice to your customer.

To do this, you will first need to mark the invoice it as sent. Then, you will be able to either match the credit note to this invoice or allocate the overpayment against this invoice.

This way, the amount will be reduced and only the remaining amount will be taken by GoCardless when the invoice is sent out or the ‘Take payment now’ button is selected.

Reconciling invoice payment

If you have enabled auto-reconciliation for GoCardless invoices, FreeAgent will automatically mark the invoice as paid once payment has been received. It will also reconcile the charge that GoCardless has issued to you for using the service.

If you haven’t enabled auto-reconciliation, you will need to mark the invoice as paid and account for the GoCardless charge manually.

Find out more about how the GoCardless integration works.