UK Bank Feeds – a new way of working
Henry Ford, the pioneer of what we recognise today as Lean Manufacturing, introduced a revolution centred around the elimination of wasteful processes more than a century ago. In his autobiography he explained the essence of it as:
“I believe that the average farmer puts to a really useful purpose only about 5% of the energy he expends. Not only is everything done by hand, but seldom is a thought given to a logical arrangement…his whole idea, when there is extra work to do, is to hire extra men. He thinks of putting money into improvements as an expense. It is waste motion – waste effort – that makes farm prices high and profits low.”
While I wouldn’t suggest that Ford’s farmer is perhaps the best proxy for accounting, take a moment to look around your desk and office. Aside from the odd PC, I’d bet that paper still rules the roost. But more than that, repetitive paper based processes and workflows still dominate the world of accounting and bookkeeping.
We love a challenge
So, in a few weeks we’ll be rolling a new capability to our UK customers which securely imports daily banking transactions straight into Xero. While we’ve had this running for over twelve months for the hundreds of Xero UK customers who bank with HSBC, the UK bank feeds release will enable this ability for most UK banks, credit cards and financial institutions. Around eighty new UK feeds will be added all told.
So, why is this such a big deal for small businesses?
Cash is king. Providing the capability to check your live bank balance and cash transactions from within Xero not only means there’s one less website to visit every morning, it also means that cash based businesses have a fully automated mechanism for loading, analysing and reconciling their cash. Instead of sitting down once a fortnight – if you’re lucky – with a paper bank statment and then repeatedly manually keying, matching, marking and reconciling payments and invoices for each statement line, Xero will will enable you to do a bank rec in minutes every day. Not only do you save time but, critically, you get the benefit of complete, up-to-date visibility of cash.
So, why is this such a big deal for accountants?
Eliminating the need for accounts staff to manually capture, key and reconcile their clients’ accounts not only benefits the clients, but the internal practice efficiencies are multiplied many times over.
Is bank feed data capture a silver bullet, should all my data now come in from my bank statement?
No. While every business will benefit from automated bank feeds, it stands that the more cash based your business is the more you will benefit. But we believe that loading and coding with automated bank feeds, coupled with the full accrual accounting capabilities already present within Xero, will eliminate huge amounts of wasteful re-keying of cash movements, as well as providing hyper realtime management reporting that is sourced from the real, current cash position – not what it was weeks ago when you last did a full bank rec – could be transformational for many small businesses.
We are really excited about finally bringing this service comprehensively to the UK market, stay tuned for more insight as we get closer to launch.
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