Xero addresses SMEs’ cash flow challenges with new Open Banking tools

Small business platform Xero has unveiled two new payments features, powered by Open Banking and e-invoicing respectively, to help UK small businesses manage cash flow.

The first of these new features is a bill payments tool which enables businesses to manage, approve and pay bills without leaving Xero, by setting up direct bank transfer as a payment method for bills, and using Open Banking to batch pay multiple bills from their bank account.

UK businesses with a UK bank that supports Open Banking can now complete their end-to-end accounts payable process in Xero.

The Open Banking payment services functionality has been enabled by a partnership between Xero and financial services provider Crezco.

According to Xero, this makes it the first major small business cloud accounting software in the UK to offer on-platform bill payments using Open Banking.

“Paying bills is crucial for cash flow, but itʼs still a very manual process for many small business owners,” said Jo Copestake, UK sales director at Xero.

“With our bill payments feature, small businesses can avoid manual bank transfers, funding external wallets and accounts or entering credit card details. It’s all about making life easier and saving time on everyday admin.”

Xero is inviting eligible UK customers to register for the bill payments beta, with the new feature being made available on 27 November 2023.

The small business platform has also launched e-invoicing in the UK, initially offering the ability for its customers to receive e-invoices.

Xero’s ‘eInvoicing’ uses the Peppol network to enable the electronic real-time delivery of invoices between small businesses and their trading partners.

“Itʼs a faster and safer way to send and receive invoices – itʼs automated, and it removes the need to create paper or PDF invoices, as well as the process of scanning, emailing and manually entering them,” said Copestake.

Effective immediately, small businesses can register to receive e-invoices in Xero, with bills coming straight into the platform.

Xero’s offering to its 3.95 million subscribers includes a core accounting solution, payroll, workforce management, expenses and projects.

In August this year, Xero and GoCardless extended their existing strategic partnership for another five years.

Through the partnership, Xero’s small business customers can connect their online invoice payments to the GoCardless platform.