Global small business cloud accounting platform Xero is joining forces with South African banks and SARS to help small and medium enterprises (SMEs) with digital tools to better manage cash flow and enhance productivity.
The New Zealand-domiciled public technology company has in recent weeks been rolling out digital bank feeds for SMEs in partnership with banks, saying the tool helps businesses to track performance and focus on growth.
A bank feed is a digital link between a bank account and accounting software, automatically importing bank transactions into a business’s accounting software on a daily basis. It also helps business owners to avoid the mistakes that can often be made when manually inputting lots of transaction data.
Xero, listed on the Australian Securities Exchange, is also working with the South African Revenue Service to simplify the process of VAT filing for small businesses.
Yesterday, the company announced a partnership with Investec to launch another digital bank feed, which Xero says will help SMEs to easily reconcile statements; create smart, shareable reports and online invoices; and review cashflow.
According to Xero, bank feeds are “a great example of the transformational role open banking can play in helping South African small businesses to automate processes”.
Xero sealed a similar partnership with Nedbank in January, to provide SME clients with access to their financial data through a fully-digital application programming interface (API)-enabled bank feed.
“The bank feed with Investec uses the same technology as the one we launched with Nedbank earlier this year. Our bank feed with Nedbank marked South Africa’s first fully-digital API bank feed, giving small businesses and their advisors access to daily financial data – helping them to manage cash flow better,” Colin Timmis, Xero SA country manager, tells ITWeb.
“Bank feeds are one of the greatest innovations in accounting, and their impact for small businesses in other markets has been incredible. They help small businesses to save time on manual tasks and give them a real-time view of their cash flow – which is critical in these uncertain times.
“We are in conversation with a number of other banks in South Africa, as we believe this is an important service all banks should offer their small business clients. We collaborate with many organisations in South Africa to support small businesses and their accountants with the digital tools they need to thrive, and to drive those industries forward.
“With the impact of COVID-19 and other economic uncertainties continuing, we all need to work together to support small businesses. This means making sure they have the digital tools they need to grow,” he adds.
“New technologies – like API bank feeds – are helping to automate manual processes like tax filing and support small businesses to better track performance and plan for their future. This is freeing them up to focus on growth, which creates employment and a healthier economy for all.
“As the first accounting and small business platform in South Africa to introduce fully digital bank feeds earlier this year, we’re excited to continue this innovation with like-minded organisations like Investec.”
Commenting on the Xero alliance, Wayne Summers, head of open APIs at Investec Digital in SA, says: “Our aim is to not only offer transactional convenience for our clients, but to become a full-fledged digital business enabler and financial partner in their business journey. The introduction of Xero is the next step in the bank’s evolving proposition.
“Whereas traditional banking focuses on product offerings, there has been a paradigm shift in the financial services sector. Digital banking that responds to a changing technology environment and user needs must put the client firmly at the centre of any new offering. Today any bank has to think about what is best for a client rather than what is best for the bank. This is the way the world is moving.”
On working with SARS, Timmis says: “This year, we were the first cloud platform in South Africa to introduce direct VAT eFiling from our platform. This allows businesses to prepare, store and e-file VAT returns to SARS from Xero in just a few clicks.”
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