Xero - one of the UK’s fastest growing online accounting providers ‘in the cloud’ - is the first accounting provider to launch bank feeds across the UK and Ireland – covering more than 55 financial institutions. For instance time savings of as much as 90% can be made on the processing of bank statement data. Xero believes that SMEs – thousands of which already use Xero – will benefit not just from time-savings, but having greater visibility of daily business performance.
By enabling bank transactions to appear automatically inside the accounting application, time consuming, manual keying or importing of bank transactions is eliminated. Instead banking data automatically downloads daily into Xero, giving small business owners a real-time view of their cashflow.
Xero market tested its bank feed strategy in the UK when in May 2009 it entered into an exclusive arrangement with HSBC to make bank feeds available to the Bank’s customers using Xero. The success of this initiative has provided the motivation to extend bank feeds to a greater number of banks in the UK.
As well as a huge help to small businesses, bank feeds provide associated accounting firms with significant efficiency gains. Accounting analysis is also much simpler and faster, interaction with clients more timely, and there’s the opportunity to add value by producing regular management reports and supporting services. Bank feeds provide a revolutionary opportunity for the UK accounting profession to update, add value, be competitive and stay relevant.
“We are excited to be the first accounting vendor in the UK to connect banking to accounting with daily banking transactions automatically loaded into Xero, says Xero UK Managing director Gary Turner. “Our experience with bank feeds in other countries is that it is the first business process change that small businesses have implemented for many years. Having near real-time accounting is transformational and we believe all small businesses will demand bank feeds in their accounting software over the next three years.”
“Automated bank feeds so profoundly transform a business owner’s ability to manage their cash that we decided that it should be a standard feature for no extra cost, regardless of whether you have one bank account or ten.”
Xero ahead of competitors, including Sage
Gary Turner says the launch of automated bank feeds puts Xero ahead of both its online competitors and laggardly incumbents such as Sage. “Xero is four years and 27,000 customers farther down the track and our growing momentum makes us a real alternative for small businesses and their accountants.”
“We admire the past success of old guard businesses such as Sage, but its ability to deliver the kind of fresh innovation that is being demanded by small businesses today will always undermined. This is because Sage is addicted to its software maintenance revenue model that forces customers into regular and often costly upgrades, to what is now an ancient product family,” says Gary Turner.”
“Sage may make noises about embracing a more cloud-based strategy, but the reality is it can’t do so without inflicting real damage to its existing business interests - a painful compromise that Sage remains happy to pass on to its customers.”
While ground breaking in the UK, Xero has already found huge success with bank feeds in other parts of the world such as Australia and New Zealand. In these countries all major banks support bank feeds into Xero and more than 75 percent of Xero customers take advantage of bank feeds.
Bank feeds tested in the UK – comments from users
“Most clients haven’t seen anything like bank feeds – this is a real wow factor, says Moore Stephens Partner Guy Robinson. “They can see transactions deposited straight into the bank account and as well as meaning they are better informed, it saves them time too. For example, one client used to spend 90 minutes a day dealing with transactions, receipts and bank statements, and then reconciling that information. Now, the information is there each morning within Xero and takes just 15 minutes to post.”
“Since the beginning of the recession, demand for up to date accounts and the ability to react more quickly has increased, says Guy Robinson. Online accounting - and in particular, live bank feeds - means that small businesses can do that. It also gives banks confidence when they are lending money to small businesses because they know the information is truly up-to-date.”
“The HSBC live bank feed is ideal for me, says Tim Savage of Tim Savage Associates, a firm that provides in interim management services. “I’m always on the move and my files aren’t all in one place, so being able to log into Xero and the latest bank transactions are automatically updated into my accounts – I don’t need to re-enter the information, it’s just there. In practical terms, it saves time and it prevents errors.”
“I use the HSBC live bank feed and it works like clockwork, says Tom Perkins, the Creative Director of design company Custom Studio. “It means that there needs to be very little communication between me and my book-keeper – we both know the current situation, it saves us both time and I don’t need to pay her to input bank data. Day to day, I can go into the system, see my latest transactions, as well as the current balance and what invoices have been paid.”
ENDS
