Small business cloud accounting firm Xero is strengthening its partnership with U.K.-based recurring payments solution provider GoCardless to expand their offerings to U.S. joint customers.
The firms announced their expanded collaboration via press release Tuesday (Oct. 22), with their tie-up allowing small businesses to automatically accept recurring payments from their customers and then mark those invoices as “paid” within Xero.
Their collaboration, which is already live for SMB clients in the U.K., Australia and New Zealand, targets small suppliers struggling with delayed and late payments from their clients, the companies noted.
“Small businesses drive economies of the world, yet late payments are a big issue for small businesses and impact how they make day-to-day decisions,” said Xero Founding Chief Technology Officer and Executive General Manager for Payments Craig Walker in a statement. “By working with GoCardless, we’re helping to remove the hassle of late payments so small businesses can save more time and focus on doing what they love so their business can thrive long term.”
GoCardless enables businesses to collect ACH debit payments in the U.S. and pre-authorized debit (PAD) in Canada to automatically collect on recurring payments authorized by their customers. Those authorized collections are then integrated into the Xero platform for streamlined accounting and reconciliation.
In their announcement, Xero pointed to data from its Small Business Fintech Outlook report, which found that the majority of small businesses in the U.S. and Canada have faced cash flow challenges: Cash flow management and getting paid on time were cited as the two most common reasons why businesses faced financial difficulties in the last year, the report found.
In another statement, GoCardless Co-founder and CEO Hiroki Takeuchi also noted that most U.S. businesses continue to make B2B payments via paper check.
“That’s a staggering amount of revenue that is processed offline, with little visibility or control on the part of the merchant,” he noted. “Through our partnership with Xero, we can offer businesses a better, more integrated way to collect payments across the U.S. and Canada so they can avoid high fees, late payments and the stress of worrying about cash flow.”