Automated bank feeds are something of a secret sauce for accounting sofwtare targeted to SMBs. Xero has managed to get a toehold in New Zealand, at least in part, because their strong relationships with the banking institutions enabled them to secure rich bank feeds.
The UK market however wasn’t so easy and despite having a presence there for a couple of years, HSBC was the only bank that Xero had managed to convince to let them access customer data. Until now.
Xero just advised via their blog that in a few weeks they will be rolling out around 80 bank feeds from UK banks covering traditional banks, credit card companies and other financial institutions.
This may well prove to be a tipping point for Xero in the UK were, it’s fair to say, their trajectory has failed to live up to the successes in their home country, New Zealand. Despite much talk about how collaboration between a business and its adviser, and the ability to integrate different applications would prove paradigm changing for SMBs, the fact is that it’s automated bank feeds that help tip customers over the buying decision that enables them to see the value in all that other stuff which tends to be harder to setup.
This is an exciting moment for Xero, and it’ll be interesting to watch the response of their UK competitors, FreeAgent, Kashflow and ClearBooks. While bank feeds aren’t a silver bullet from a customer perspective, they very well may be from Xero’s perspective with shareholder demands to get closer to the ever elusive breakeven point. It’s worth noting that Xero’s half year report is due in a few weeks.
Anyway, last words go to Xero UK MD Gary Turner who nicely summarized up the value of automatic bank feeds by saying:
…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.