Xero bank reconciliation with GoCardless

If you’re using automatic repeating invoice generation with Xero, and a monthly direct debit plan with GoCardless, there’s a ‘problem’ in that the value credited to your bank account by GoCardless already has their transaction fee deducted – so Xero won’t spot the invoice amount to reconcile against.

Here is how to use Xero’s bank reconciliation screen to do it.

Go to your bank reconciliation page in Xero. You’ll see that the incoming cash isn’t matched. Click on the Match tab.


You’ll see a list of all your unmatched invoices. Pick the one that matches and Xero will alert you to say the total is out by (in my case) £2.


Click on the Adjustments button and select ‘Bank fees’. Type in something like the following.


Note: GoCardless fees DO NOT include VAT. I asked them. They said:

In the UK payment processing is VAT exempt. As such, no VAT is paid on any of the GoCardless transaction fees.

Everything should now go green and you should see the OK button appear at the top of the panel:

OK to match

Job done!


About saasmd

I am an experienced software-as-a-service entrepreneur, based in London, UK. I love building interesting software businesses. My current venture is StorIQ, a platform to help bricks-and-mortar retailers manage their operations more effectively. This blog is a space to share low-level techie stuff that I think other people will find useful.
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