{"id":22123,"date":"2023-07-28T19:40:03","date_gmt":"2023-07-28T14:10:03","guid":{"rendered":"https:\/\/open.money\/blog\/?p=22123"},"modified":"2024-06-06T18:19:24","modified_gmt":"2024-06-06T12:49:24","slug":"connected-banking-101-for-indian-businesses","status":"publish","type":"post","link":"https:\/\/open.money\/blog\/connected-banking-101-for-indian-businesses\/","title":{"rendered":"Connected Banking 101 For Indian Businesses | Best banking transformation"},"content":{"rendered":"

Let us check out a typical \u201cpayments day\u201d for Raj, a Proprietor of a supermarket with two outlets and his accountant before adopting connected banking.\u00a0<\/span><\/p>\n

The accountant logs into the accounting tool and the two current account banking portals. Through the first one, he pesters Raj for OTP for each payment, while through the other current account, he uploads an Excel sheet with 14 columns of payment details. Later pesters Raj to go through the entire sheet and approve. Then, the accountant downloads the e-statement and manually matches them with the entries in the accounting software. By now, the day is already over.\u00a0<\/span><\/p>\n

However, he still has to make journal vouchers for unaccounted entries and Raj is waiting for an update.<\/span><\/p>\n

Raj owns multiple current accounts and yet struggles to leverage their current accounts and manage their business finances better. That’s why most banks including – SBI, ICICI, Axis, Yes Bank, and 11 other banks have partnered with business payment platforms such as OPEN<\/a>, offering Connected Banking as a feature to their current account holders.<\/span><\/p>\n

With frustration, both Raj and his accountant finally looked for a solution and came across \u201cConnected Banking<\/strong>\u201d.<\/span><\/p>\n

What is Connected Banking and how has it transformed his life?<\/b><\/span><\/h2>\n

Raj quickly connects both the current accounts and the accounting tool with the Connected Banking platform.<\/a>\u00a0<\/span>This unified solution empowers the accountant to effortlessly make payouts against invoices and collect payments from customers against bills directly from the accounting tool.<\/span><\/p>\n

Bank balances and e-statements seamlessly flow into the accounting tool, making reconciliation 90% faster and the balance sheet accurate.<\/span><\/p>\n

As a result, Raj can eliminate almost all manual efforts and errors in AR & AP and stay in control of their cash flow.<\/span><\/p>\n

Why do SMEs need Connected banking?\u00a0<\/b><\/span><\/h2>\n

It is simple: To manage all bank accounts in one place. However, let\u2019s go one by one.\u00a0<\/span><\/p>\n

1. Piling Payouts<\/b><\/span><\/h3>\n

Carrying and transferring cash itself incurs costs. Writing, tracking, and depositing cheques consume valuable manpower. While bank transfers are secure, dealing with numerous OTPs or preparing spreadsheets for bulk payouts eats accountant\u2019s as well as proprietor\u2019s efforts for breakfast, lunch, and dinner.\u00a0<\/span><\/p>\n

Then comes the need to create payment entries with the UTR number for all these payouts in the accounting tool which secretly eats up your energy for an evening snack.\u00a0<\/span><\/p>\n

Amidst these manual efforts, payments to vendors might get delayed, placing the vendor relationship in jeopardy.\u00a0<\/span><\/p>\n

Features of Connected Banking that simplify payouts:<\/b><\/span><\/p>\n