Automatically reconciling payments is one of the key time-saving processes that Directli handles for you. In order for it to work effectively, we help you configure a Suspense Account in Xero during the setup process.
During the setup process you will be asked to select the account to which your money gets paid by GoCardless. This is the actual bank account where you will receive your funds. We will create the Direct Debit Suspense Account for you automatically and call it Direct Debit.
The accounting principles
Into the Suspense Account we will post a payment against each invoice for which we take a payment. This will be for the full amount that is due on the invoice so that it shows as paid in full. This will be paid against the invoice on the day the money is due to leave the customer's accounts.
On the day you receive a payout from GoCardless, which could be for multiple invoices, we will make one payment out of the Suspense Account to your nominated fee account, and transfer the payout (net of fees) into your current account. This ensures that your Suspense Account shows all the correct transactions and so reconciling your Current Account is as easy as marking one transaction against the transfer, instead of having to mark it against potentially hundreds of individual invoices and fees.
Image shows the Direct Debit bank account
In this example we have received two invoice payments. One for £900.00 and one for £70.00. The total fees for the payout were £2.70 that have been allocated to our Bank Fees account and into our Current Account we have received £967.30.
On your Current Account reconciliation page, once your bank feeds have been imported, your receipt from GoCardless should automatically match for reconciliation against the transfer we created from the Direct Debit account.
Image shows the Reconcile screen of your Current Account
The only part of the reconciliation process that we cannot yet automate, is the final reconciliation of the transfer out of the Direct Debit account. When viewing the Direct Debit Account Transactions page, you will see the transfer as unreconciled.
Image shows the unreconciled transfer transaction in the Direct Debit account
In order to reconcile this, you must click into the transaction, and then click Options (top right of the transaction details) and then choose 'Mark as Reconciled'.
Image shows the Mark as Reconciled option within the Options menu.