The accounting provider says its direct bank connections now cover 95% of the transaction accounts used daily by its customers.
Bank feeds are a useful feature in accounting software, as they can reduce the amount of data that has to be entered manually, and speed up reconciliation by reducing the number of errors.
There are basically two ways that accounting software providers can provide bank feeds: by entering into relationships with each institution, or by using third-party services such as Yodlee, which typically work by automatically logging into internet banking sites using the customer's credentials and extracting transactions, a process often known as ‘screen scraping’.
Xero has recently signed agreements with 100 Australian financial institutions for direct bank relationships, reducing its reliance on Yodlee.
Direct relationships provide the possibility of bidirectional data flows, allowing banks to take into consideration customers' financial records when processing loan applications, for example.
Xero’s list of direct bank feeds can be found here but at the time of writing it did not appear to be up to date because only around 80 were listed. The company reports any issues with bank feeds here.
“Today’s announcement is an important milestone. Our close partnerships with the banks are helping us tackle some of their biggest pain points for small business – lack of financial transparency, managing cash flow and getting better access to lending,” said Xero Australia managing director Trent Innes.
“Through direct bank feeds, providing more payment options and opening up lending through two-way data sharing – Xero and our partners are creating growth opportunities for small businesses across Australia.”