How does Accounting Data help make Smarter Credit Decisions?

Data Lending Product |

3 mins read

Small businesses have been transforming digitally and increasing their use of digital tools for ease of doing business. The use of accounting tools to record and manage their expenses, receipts and claims has made it easier for businesses to operate and gather insights that may help them to optimize and grow. While such accounting information of small businesses may have not been as easily accessible by financial service providers earlier, fintech today has made it possible for financial service providers to connect to the platforms being used by small businesses, including accounting and book-keeping applications, to gain access to the data being generated by the small businesses on these platforms. This allows financial service providers to gain access to valuable data being generated from the digital footprint of their small business customers, enabling them to gain deeper insights into their customer’s business health for smarter decision-making.

Accounting Data and Why is it Important?

Accounting tools and book-keeping applications help small businesses in recording transactions and manage their accounts better. The data being recorded on such tools provides crucial information about the business, tapping into which can help financial service providers understand the business’s payment pattern, identify possible fraud and gain insights into the finances and cash flow of the business.

Some other attributes of the accounting data of a small business may include:

– Payables and receivables

– General ledger

– P&L and Balance sheet

– Deposits, transfers and withdrawals

– Invoices and payments

– Inventory summary

Gaining access to the accounting information of small businesses can help financial service providers to:

– Gain an overview of the small business’s health

– Understand the cash flow of the business

– Identify data discrepancies and flag fraudulent entries

– Gain insights into the repayment capacity and creditworthiness of the business

– Enhance risk assessment with access to authenticated data

– Minimize losses associated with fraud and poor risk assessment

– Enable reconciliation alongside other data such as bank data

Access Accounting Data with PowerCred

PowerCred understands the value of accounting data and offers API integrations that can help financial service providers make the most of their small business customer’s accounting information. Financial service providers can gain seamless access to their customer’s accounting and booking-keeping information from multiple accounting tools and book-keeping applications using PowerCred’s Accounting Data APIs. PowerCred’s universal API enables financial service providers to access the real-time, user-consented accounting data of their small business customers without the hassle of managing multiple integrations. Such accounting data helps them gain an overview of their small business customer’s financial health and gain deeper insights into the creditworthiness of the business and the risks involved, for making smarter credit decisions. The authenticated accounting data accessed using PowerCred’s API can also help financial service providers flag potential fraud by identifying data discrepancies in the transactions, minimising the losses associated with such fraud. PowerCred’s accounting data APIs offer seamless access at speed without complicating the existing user journey and integrating to go live in less than a week.

If you are a financial service provider looking to leverage your small business customer’s accounting data for making smarter credit decisions, get in touch with our team or book a demo with us to understand how we can be of help to you. You can also take a look at our simplified API documentation right here.

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