What is Open Accounting Technology?
Open Accounting is the practice of a business providing consent to a financial institution to access their accounting platform (such as Xero, Sage or Intuit Quickbooks) in order to provide tailored financial services. The deep, richly contextual financial data housed in a business’s accounting platform is exchanged to help inform decision making and product design by the financial institution. Common use cases include loan origination, client onboarding. It also helps at credit risk decisioning, plus accounting and compliance services. Open Accounting technology is the platform that connects to the SME’s accounting copies, maps and transposes the data through the internet. This information is then rebuilt to a normalized chart of accounts structure in order that a lender can connect to one API and consume the normalized data from all accounting systems. This commonly delivers a 65% reduction in time to cash, drastically reduces the workload in underwriting and removes the need for data entry of the clients financials. In effect allowing for auto spreading and then if desired auto decisioning.
Why use Open Accounting data?
Why is Open Accounting data so powerful?
It provides a detailed, up-to-date snapshot of the financial health of a business. Unlike credit bureau data or audited accounts, which present a historic view, Open Accounting data offers immediate insight as to the current health of a business’s accounts. The data comes in a standardized format via robust APIs in order to automate critical financial processes for small and medium size businesses.
You can pull the data repeatedly via scheduling or using a persistent connection for online applications. This can then give a clear view of trends over time whether to provide advance warning of delinquency or pre-empt a clients need for credit allowing a bank to make pre-approved offers in advance of the client knowing they had a need.
DataShare from Validis
Validis DataShare is a software solution used by the world’s leading financial institutions and accounting firms. It is driving an agenda of innovation and digital processes to help streamline their client experience.
DataShare enables small and medium enterprises (SMEs) to share their full financial data history directly from their accounting package in a standardized format, speeding up loan decisions, powering audits and improving insight.
Validis has developed pre-built integrations to the common loan origination systems. We would be happy to discuss your specific use case and integration requirements.