“Open banking is one of the methods small firms can employ to manage their finances, and better understand how money moves around inside their business.

If properly harnessed, there is the potential for open banking to help small firms become more efficient, by putting their financial data in one place and using specialist tools to streamline tasks like processing payments, while also helping to highlight opportunities for savings, as well as possible areas of concern before they snowball into real problems.

Small firms taking their first steps in open banking may wish to experiment with automation, freeing up time and saving money. Accepting a wider range of types of payment is another potential benefit, along with more rapid payments as funds can clear in a shorter time. Access to finance may be improved too, by using open banking tools to allow lenders a closer look at a business’s finances, enabling much faster eligibility checks.

Having more data at their fingertips will empower small firms to take control of their finances – as long as they have the right tools, from dashboards to alerts, set up to manage incoming information without becoming overloaded, or losing sight of the bigger picture."

“As small businesses continue to face economic challenges, having access to digital tools that can help them manage cash flow is essential.

Having digital bank feeds is one way small businesses can leverage open banking to save time by not having to re-enter data or manually upload bank statements. Having bank transactions flow directly into accounts software such as Xero provides reliable, up-to-date data on the business’s cash flow position that can then be used to make more informed business decisions.

Paying bills is another crucial part of cash flow management, and yet it’s a very manual process for small businesses. In an effort to make the accounts payable process easier, more simplified and secure, we launched a new bill payments feature using open banking. This means small businesses can pay multiple bills without leaving their accounts software, saving time on manual admin and having greater control over their cash flow.

Small businesses want things that are automated, that save them time, and make the day-to-day running of their business easier. We look forward to continuing to work with the industry to explore how we can further leverage the power of open banking and find new ways to make life easier for small businesses.”