Digital adoption has seen a revolutionary change in the past decade, which has been significantly accelerated as a result of the global pandemic. In this context, the open banking revolution offers countless opportunities for providers of services like accounting, budgeting, investment advice to businesses.
The accounting software market was valued at USD 12.01 billion in 2020 and is expected to reach USD 19.59 billion by 2026. Considering the current digitally-oriented environment, open banking brings a significant impetus to the accounting software market that is growing exponentially. Open banking can benefit any type of accounting service provider – be it an accounting firm that handles the activities for hundreds of SMEs or an accounting software used by the financial director of a big corporation with offices spread across the globe. Open banking-powered tools can be used to optimise accounting processes at all levels by automatising complex and repetitive tasks.
Salt Edge has been empowering accounting companies to use open banking features for the past two years. And today we’re going to explore how tech-forward accounting companies and software can reap the benefits of open banking-enabled digitalisation.
1. Upgrade your accounting soft with automatic import of bank data
Many accounting processes are still head over heels dumped in spreadsheet piles. Currently, many accountants still have to extract bank statements in excel/PDF formats from many different banks and then include the data manually or semi-manually in the accounting software, which is highly time-consuming and prone to human error. That’s why live bank feeds become the most important digital link for accounting, ushering the new era in this market. Leveraging open banking, accounting companies get instant access to clients’ data from any bank in any country in an easy and compliant way. All the data is ready-to-use because it has been normalised into a unified format, eliminating the need to convert the data from different banks to a common standard. Automatic upload of data considerably reduces the risk of human error, saves time and money, and improves productivity.
The automation of data import directly from the bank can also help with onboarding dozens of new companies in the accounting soft. Every accounting company knows first-hand that this process could be challenging. Automatic import of live bank feeds data, including KYC details, account numbers, and personal data simplifies the onboarding flow, creating a seamless user experience and less manual work for accountants.
On top of that, accounting companies can get years of transaction history via one seamless integration in just several clicks to finally break free from the spreadsheets avalanche. Automation of bookkeeping ensures greater transparency, enhanced real-time reporting, and improved liquidity.
2. Add a digital boost to invoicing, billing, and reconciliation
Getting all the transactions directly to the software considerably simplifies tax calculations by adding and classifying the data automatically regardless of the bank or account type. Manual invoice fulfillment can be easily automated via open banking to stop matching payments with open invoices endlessly.
Another time-consuming and error-ridden accounting process is the manual bank account reconciliation, which can be automatised with open banking. Thus businesses can minimise the time, cost, and amount of potential errors.
To top it off, the bank data can be further processed by smart algorithms to create up-to-date and actionable insights that enable accounting apps to incorporate budgeting, forecasting, financial reporting, and cash-flow analysis features. During times when economic uncertainty reigns, ERP budgeting, and forecasting bring clarity to business decisions. Knowing how much money a business can spend is vital, and can help to stay afloat.
3. Enable to make payments directly from the accounting soft
As our world is rushing towards a cashless society, open banking offers the possibility to pay salaries, taxes, and any invoice directly from the accounting software. Businesses get the option to pay seamlessly directly from the accounting app with a bank account, eliminating the back-and-forth of traditional payment processing. Handling payments inside the accounting app provides a prime opportunity to increase customer loyalty by helping them save time. Instant payments via open banking reveal the possibility to move from sluggish outdated and expensive processes to recoup payments faster.
Payment initiation functionality can boost efficiency by automating payments with recurring billing and installment plans or batch payments, and bundle processing to handle several transactions all at once. With open banking, businesses can enjoy receiving or sending payments with minimal fees, up to 5 to 10 times lower in a matter of several seconds.
Ready to start using open banking?
To summarize, the formula for success in modern financial services and technology requires placing the customer at the center of every decision, collaborating to innovate. Embracing open banking makes next-gen solutions accessible for every business, but they should be sure that the rush to leverage this innovative technology does not leave gaps in future strategies. There is plenty of technical, compliance, and security matters that could become challenging for a company to cover without assistance. Choose the partner wisely.
Salt Edge offers a helping hand by taking care of all those aspects and more for you. We provide real-world solutions to challenges. Are you in?