Is Xero's real-time banking technology revolutionary for practices?
ONLINE ACCOUNTING provider Xero has certainly created a bit of a stir with the launch of technology that enables its clients to receive real-time banking data straight into their systems. Some 55 banks are now working with Xero, after 18 months solely with HSBC.
As this is a practice-focused blog, rather than for tech-heads, I’d rather talk about what this could mean for firms.
There is one major potential benefit for a practice.
Bank reconciliation is a tiresome, low-value task often undertaken by clients’ advisers.
Simply not having to deal with this any more frees up accountants’ time.
The trick is what you do with those extra precious few minutes gained per client.
Have a cup of tea? Well, that’s fine if you’re knackered and need a breather.
But efficiencies gained across dozens of clients could be better spent developing the business either finding new clients or, dare I say it, providing clients with value-added services.
What value-added services? You ask. Well, what about using the real-time banking data of your clients to keep a closer eye on their cashflow? Dashboard the data, analyse it, look for trends, or even just call them up if they’re likely to break their overdraft limit.
How Xero’s new technology will revolutionise firms’ working practices is moot. I don’t really know if the time savings/real-time data benefits will stack up to anything fundamental.
But you can’t knock them for trying. And in a world where Vince Cable, lenders etc are crying out for better SME finance data, Xero may have released their new kit at a very opportune time indeed.