Xero and Nedbank’s plan to save small businesses time and money

The direct link between bank accounts and accounting software is already proving popular.
Having a constantly up-to-date view of their payment and receipt activity allows business owners to manage their cash flow more effectively. Image: Shutterstock

Earlier in the year Nedbank and global software firm Xero launched a direct bank feed that would link Nedbank small-business-client accounts to the Xero accounting platform, a first in South Africa. Clients can now access the service.

Nedbank and Xero say use of the new service is growing steadily.

“We have had a good uptake to date,” says Alan Shannon, Executive for Professional and Small-business Banking Client Engagement at Nedbank.

“We have quite high expectations that more business owners will start using the service when they learn about the capabilities and experience the benefits of using the feed.”

Seamless

The fully digital bank feed enables small businesses and their accountants and other advisors to import banking transactions directly from Nedbank into their Xero accounting software. When the account is linked to Xero, the process is secure and automatic.

Simply put, whenever a business owner pays a supplier from their bank account or receives a payment from a client into their bank account, the transaction will be reflected in their books automatically, and the relevant balances will be updated each business day.

This means the business owner will always have an up-to-date view of their balance of creditors and debtors so they can manage their cash flow more effectively.

Small businesses and their advisors will be able to reconcile statements; create smart, shareable reports and online invoices; and review their cashflow from anywhere.

This will significantly reduce the time spent manually importing data and give small businesses an up-to-date view of cash flow.

This in turn will help them better understand their business performance so they can make informed business decisions during these critical times, says Shannon.

Alan Shannon of Nedbank. Image: Supplied

Colin Timmis, Xero Country Manager for South Africa, says: “While cloud-based accounting systems have been available since around 2000, only since 2010 have accountants in South Africa really started to adopt them. The last few years saw a real escalation in usage. Our research shows a 50% increase in cloud adoption among SMEs [small and medium-sized enterprises] over the last three years. Previously, access to financial information was restricted to the place of work or to a single server.”

Both Timmis and Shannon say that one of the most important benefits of the direct feed between Nedbank clients and Xero subscribers is its ability to save business owners much time and effort.

“The relationship between a business owner, their accountant and the bank is often fragmented,” says Shannon.

“Business owners want to run their businesses. They don’t like to spend a lot of energy on accounting, bookkeeping and administration.”

Traditionally, a business owner would supply information to an accountant a few times a month, and the accountant would ‘write up’ the books and supply a report a few days later. Once or twice a year, the accountant would produce formal statements.

Shannon says the shortcomings of this became obvious with the announcement of the special financial assistance during the pandemic, where Nedbank could disperse the Covid-19 small- and micro-enterprises loans underwritten by the government and funds on behalf of the South African Future Trust.

Colin Timmis of Xero SA. Image: Supplied

“We needed information to help clients. Information wasn’t readily available. We couldn’t assist small business owners as quickly as we would have liked to,” says Shannon, adding that updated information is also important in normal circumstances.

“Accounting records will become less of a hassle with technology like bank feeds and cloud accounting platforms, making information more readily available, which will help business owners in applying for funding faster.”

Collaborative strength

Shannon says that Nedbank partnered with Xero on the strength of its global leadership in direct bank feeds over the past decade. Xero has bank feeds with major financial providers across the world, including NatWest, Wells Fargo, Barclays and Westpac.

“It’s a secure pipeline between Nedbank and Xero that the client can enable for the direct push of their banking data into their accounting software. No manual uploads are necessary, and there are no delays and no third parties. It puts our clients in control.

“Businesses have been using technology to do their banking for years,” he adds. “Banking technology is advancing fast and so is the adoption of new technologies by businesses. Why enter a branch when a gadget in the palm of your hands allows you to deal with your banking matters more conveniently and at a lower cost?”

Nedbank says the new technology offers its business clients vast benefits:

• The manual inputting of financial data into an accounting system is replaced by a seamless automated feed. This saves time and improves accuracy – a big benefit for accountants.

• Business owners have more time to concentrate on their core business instead of the time-consuming accounting process.

• The direct feed gives business owners quicker access to financial reports and an up-to-date view of their cash flow.

• There is no additional cost to access this capability – the feed will be free of charge to all Nedbank small-business clients with a Xero account.

• Nedbank clients can get 50% off their Xero subscription for four months if they wish to subscribe.

Shannon points out that business owners can activate their direct feeds digitally.

“It takes just minutes to set up and they can connect or disconnect instantly on the Nedbank Money app or Online Banking.”

He believes the pandemic has accelerated change that was perhaps inevitable due to technological advances.

“If nothing else, people are adaptable and, in time, will adapt to the new normal.”

To find out more and get 50% off your new Xero subscription for the first four months, click here

Brought to you by Nedbank and Xero.

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