How the GoCardless integration works

This article explains how FreeAgent handles Direct Debit payments for your invoices once you’ve connected your FreeAgent account to GoCardless.

Please note:

  • The GoCardless integration will only be available if you have a sole trader or limited company FreeAgent account type.

  • The integration won’t be available if you have a partnership or non-UK FreeAgent account type.

  • You can only use the GoCardless integration in FreeAgent to collect payment for invoices in £ sterling, up to a maximum of £5,000 per month. If you need to increase this limit, please contact GoCardless.

Benefits of the GoCardless integration

Connecting FreeAgent to GoCardless allows you to set up Direct Debit mandates with your customers and take one-off or recurring payments from them automatically using the mandate.

You can choose to receive payments on the invoice date, payment due date or when manually triggered, to streamline the payment process and help you get paid faster. If you have repeat customers, you can create recurring invoice profiles and select the automatic email feature to fully automate the process of sending the invoice and taking the payment.

You can enable the auto-reconciliation feature to automatically reconcile payments for invoices created in FreeAgent and GoCardless charges in your FreeAgent account. Payments that come into your GoCardless account for invoices you’ve sent outside of FreeAgent will also be automatically created in the GoCardless bank account but will remain unexplained for you to categorise.

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

How the GoCardless integration works

Once you’ve connected to GoCardless, a dummy GoCardless bank account will automatically be created in the Banking area in FreeAgent. This is different from regular bank accounts in FreeAgent as it’s solely used to record the details of invoice payments, refunds and fees from GoCardless.

After setting up a Direct Debit mandate with a customer, when they make a payment to you through GoCardless, FreeAgent will automatically create a transaction in your GoCardless bank account and explain it against the corresponding invoice.

If there are payments that come into your GoCardless account for invoices you’ve sent outside of FreeAgent, these transactions will be created in the GoCardless bank account but will remain unexplained for you to categorise.

If you’ve enabled the auto-reconciliation feature, FreeAgent will automatically explain the GoCardless fees and create a transfer between the GoCardless bank account and the bank account you selected when you enabled the auto-reconciliation. This will be for the full amount paid into your bank account through GoCardless, and not just the payments for FreeAgent invoices.

When the transaction imports into the main bank account via a bank feed or statement upload, you can match it to the transaction created by FreeAgent.

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

Personal GoCardless payments

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.

Please note that the options below will only be available for business bank accounts. You won’t see these options if the bank account has been marked as personal or for a user who has been allocated the role of ‘Accountant’.

If you have a sole trader account type, select ‘Money Received from User’ as the transaction ‘Type’, choose yourself as the user that the money has been received from and select ‘Capital Introduced’ as the ‘Category’.

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If you have a limited company FreeAgent account type, select ‘Money Received from User’ as the transaction ‘Type’, choose yourself as the user that the money has been received from and select ‘Payment to Director Loan Account’ as the ‘Category’.

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