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As technological advancements march ever onward, the way that businesses deal with their accounts is also changing. Software has become more sophisticated, and technology is more mobile, with bookkeeping software evolving to reflect this.

Financial legislation has also played a part in these developments. Open Banking is the UK version of a piece of European legislation known as PSD2 (Payment Services Directive). The legislation means that customers can give their bank permission to share their data, and the bank is required to do so through a common ‘language’ that authorised platforms can interpret.

But what does that mean for businesses, and what changes has is brought to bookkeeping?

What did the introduction of Open Banking do for business?

The short version of this answer is that Open Banking has paved the way for time-saving features for businesses.

Open Banking does just that – it opens banking information up to be used in useful ways, providing that the customer gives their permission to do so.

For instance, fintech companies use this ‘common language’ to create bookkeeping software which ‘talks’ to the customer’s business bank account.

This means that the software is able to utilise this connection, pulling transactions through from the bank account or other payment portals such as PayPal or Stripe. The data is presented in the bookkeeping platform in a way that is user-friendly, and ready for the customer to check and confirm the records against their own bookkeeping entries.

free Pandle bookeeping softwareIt saves a huge amount of time that would otherwise be spent on data entry, and also reduces the risks of data entry errors.

Some software (yes, like our very own Pandle!) pulls this information through automatically, further reducing the manual process of exporting information from one place, and importing it into another.

Is this safe?

Customers have control over who to share their banking information with, and can do so knowing that they’re only able to give access to financial bodies who have been vetted by the Financial Conduct Authority (FCA).

The tech is subject to stringent security measures, with providers required to seek official authorisation to demonstrate compliance.

It’s easier to manage the finances

A business owner might have different accounts in different places. Using this tech enables businesses to pull information from multiple sources, into one place. It’s more straightforward to monitor what’s going on this way, saving precious time and effort. Phew!

Find out about our free bookkeeping software.

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.

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