Our view at Stack - Xero is a cloud-based accounting platform that offers numerous benefits. It simplifies financial management with automated bank feeds, allowing you to save time on data entry. Create, email, and print professional invoices effortlessly. Access your finances in real time via the cloud from any device. Retain records of income, expenses, assets, and liabilities securely online. Whether you’re a small business owner or an accountant, Xero streamlines your financial processes and provides a clear view of your financial health.
Bank feeds have transformed how small businesses manage their bookkeeping. Gone are the days of manually comparing bank statements with accounting records. Today, with cloud accounting, you can securely and automatically import bank transaction data and easily reconcile it, so you have a single, up-to-date view of your transactions and cash flow.
Bank feeds reduce manual admin and automate data entry. They make reconciling easy which enables you to use up-to-date information when making business decisions. Bank feeds truly unlock the power of Xero for a small business.
But misconceptions about bank feeds are still holding some people back from experiencing the benefits. Here, we set the record straight and bust the top three myths about bank feeds.
Myth #1: Bank feeds are unreliable
The UK has some of the best bank feeds in the world, thanks to UK Open Banking and the continuous enhancements being made.
Thanks to UK Open Banking, bank feeds today are more stable than ever. At Xero, we’ve been embracing open banking concepts for over 10 years, but the launch of UK Open Banking in 2018 accelerated the coverage and quality of direct bank feeds. Among the raft of new benefits it has brought, open banking has made it easier for business owners to connect their bank feeds in Xero through a completely digital process.
Yes, there were some teething issues with bank feeds when UK Open Banking was first introduced, but as an industry we worked closely with banks to develop a seamless experience over time. Xero now monitors performance through metrics like set-up consent success rates and connectivity rates on a bank-by-bank basis, and works with financial institutions to address the rare performance issues that arise.
In April 2023, the Joint Regulatory Oversight Committee (JROC) was formed to help improve the availability and performance of bank feeds across all service providers. JROC has set up a new data collection framework to track and analyse API performance from both banks and third-party providers like Xero. While this reporting is optional for now, it aims to boost API performance by enhancing transparency and accountability in the UK’s open banking system.
Henk Van Hulle, CEO of Open Banking UK said: “Open banking’s success is testament to the collaboration with the fintech industry and sectors such as accounting. One in five small to medium-sized enterprises (SMEs) in the UK now benefit from open banking, and our research has shown that firms are increasingly utilising open banking-driven cloud accounting services to understand and manage their cash flow in near real-time, speed up settlement times, and to help avoid late payment fees.
Myth #2: Bank feeds aren’t secure
Xero is regulated by the Financial Conduct Authority, and we use bank-level encryption and rigorously tested software and systems to keep your data secure.
Worried about security? You’re not alone! Many people think automated bank feeds mean opening up your bank data to everyone on the internet. But in reality, Xero bank feeds are protected by multiple levels of security. Xero is regulated by the Financial Conduct Authority (FCA), and we use high-level encryption and rigorously tested software and systems to keep your data secure. Xero provides security assurance for every method used to import your bank transactions, so you can have peace of mind that your financial data is in safe hands.
What’s more, the days of entering your bank details every 90 days are behind us. Re-authentication is now quick and hassle-free, with the option to ‘renew’ the bank feed in Xero. Accountants with standard or adviser permissions can also do this on behalf of their clients.
Myth #3: Digital bank feeds won’t save me any time
Xero users report saving up to 5.5 hours per week with bank feeds and automated bank reconciliation matches.*
We get it, setting up and finding your way around another feature can seem complex and time-consuming. The truth is, setting up a bank feed is a simple and intuitive process that can be done in a few clicks. In fact, the majority of Xero customers have already done so, which is well above industry norms.
By linking your bank directly to your accounting software, you avoid manual data entry, reduce human error and save yourself hours every week. Xero users report saving up to 5.5 hours per week with bank feeds and automated reconciliation matches.* Less time on bookkeeping means more time growing your business – or maybe just having a coffee in peace!
So, there you have it. Bank feeds aren’t just reliable and incredibly secure, they can save you precious time too. Ready to ditch those myths and embrace the future of hassle-free accounting? Why not get started connecting your business banking account to Xero. You can see all the bank feeds that are available in Xero Central.
*August 2023 survey average across 180 customers globally
The post The truth about bank feeds: Busting the top three myths appeared first on Xero Blog.
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