The union of Xavier and Receipt Bank was an easy meeting of goals.
Both companies were created to empower accountants, bookkeepers and the businesses they serve with tools for financial fitness.
We found the addition of Xavier’s technology gives us a jolt of data accuracy through their powerful data-checking automation.
Accuracy is vital for advisory. Better data means better financial decision making. For businesses looking to grow, reliable advice is a major asset.
To understand the benefits of Receipt Bank and Xavier coming together, we caught up with Simon Williams, Xavier’s Head of Product and Commercial and Will Farnell, Founder and Director of award-winning Chartered Certified Accountancy practice, Farnell Clarke Limited.
As a co-founder, what inspired the development of Xavier?
Simon: I came from an accounting practice that works with a lot of SMBs. We wanted to give as much insight and value to our client base as we could in the most cost-effective way. Many can’t afford what larger firms can in terms of reporting and insights.
Yet, we found that the quality of the data at our disposal wasn’t good enough to offer better insights. We spent a lot of time doing things that were not adding value to the customer.
At the outset, all the co-founders came together and decided to build an application based on a choose your own adventure/cash flow story. For example, if you were starting a business and wanted to add two new employees, we would use your financial information as the base of that story but alternate the scenarios.
As we went deeper, we found that actually the story itself was not very good. Because the data was not very good. We decided to focus on data quality, automating that data quality and providing insight on both the automation and data cleanup.
What does the combination of Receipt Bank and Xavier mean for the accounting and bookkeeping industry?
Will: Receipt Bank already enables control over accounting data. The addition of Xavier provides even greater control and efficiency to regular bookkeeping processes and the quality of that bookkeeping data. Good quality data is critical in enabling firms to offer the advice clients really care about.
Simon: We’re covering the data in the system that’s not related to what Receipt Bank is looking at, so financial information outside of set fields and sales categories can be accessed through Xavier. If there is something that plugs into the accounting system incorrectly, we’re able to spot that and feed it back to Receipt Bank. It works like a cycle, both products will get better and better.
Which specific Xavier features can prompt an immediate conversation with a client?
Will: Xavier enables firms to easily assess and highlight the quality of data in a client’s or prospective client’s Xero file. The ability to highlight bookkeeping errors opens a natural opportunity for firms to discuss the value they can add by taking on the bookkeeping work for the client. For me this is key. Firms need to own the end-to-end process and this starts with the bookkeeping enabling deeper client relationships and in turn greater experiences for the client.
Simon: The first thing I would highlight is data quality. The second thing is that we are able to spot particular trends in this data. So using Xavier and Receipt Bank, an accountant can indicate to their client too much of a reliance on one supplier or a decrease in net assets. This is a good indicator that the business isn’t doing as well.
These are key KPIs that we want to build into Xavier. I think there’s a number of areas where we have the data available so the accountant can look through their customer base and prioritise the ones that really need additional service. This is not only valuable for the end-user because they see the accountant offering them advisory services, but also be good for the accountant because they can offer more services. This means additional revenue for their firm.
What kind of impact does software like Xavier make on a firm?
Simon: There was one example where an accountant-client of ours ran a health check through Xavier for the first time. They found £35,000 worth of miscoded transactions for the business they were serving, which meant that their client got all that money back for the future.
Will: Xavier automates some of the activity for us, driving greater efficiency and confidence in the data we are using. The challenges for firms in moving to greater value work with clients is often inhibited by the availability and quality of data. Many firms will have seen this first hand during the COVID-19 outbreak as clients needed up to date information to access funding.
Lastly, as we move ahead, what does the future of accounting mean to you?
Simon: There will still be a real need for the human interaction between the accounts and the business user. I think that relationship is really important. In a way, the first advisor that a business gets is their accountant. What I see is that there’ll be less time spent on the traditional accounting processes. It will be a lot more real-time information.
Will: More and more millennial and Gen Z business owners are demanding a different kind of service. This will continue to drive firms to recognise the importance of shifting from offering real-time data as an add on service to it being the default. Receipt Bank and Xavier combined make this an even more compelling development.
Xavier is currently available to Xero users. Our ambition is to extend the offering to Xero users globally and gradually, to users of alternative general ledgers.