Making Bank Feeds work for you

Most practices use some form of cloud-based software to record their transactions. One of the main benefits of this is the ability to be able to use this anywhere that has an internet connection. With people working from home more often, this has become more important than ever. Most banks now offer live bank feeds that can be connected to these packages, often free of charge, so that the transactions are always up to date.

Thankfully, problems with bank feeds are pretty rare but as they are the main source of information for your accounts, there are some simple things you should do to ensure they are always working as they should. For the purposes of this article, I will be using Xero as the context for this, as it is the most popular choice of software amongst our clients.

Is the bank balance correct?

Bank feeds are usually updated daily for most current accounts. Occasionally, there may be a slight glitch with the bank which may result in missing or duplicated statements. If the statement balance shown on Xero does not match the balance according to the bank, then it may be worth checking if any problems have been reported. By clicking on the three vertical dots next to the bank logo (on the main Dashboard page) a small window will appear from where you can select “View Status Updates”. This will take you to a page which shows any known problems associated with bank feeds.

What is the difference between “Balance in Xero” and “Statement Balance”?

Basically, the balance in Xero is the running total of the reconciled transactions, so if the account is showing as fully reconciled then these two figures will be the same. If they do not match then this needs to be looked at. By clicking on the three vertical dots next to the bank logo you can select Reconciliation Report. If there are any Outstanding Payments or Receipts these are transactions that have been entered that do not have a corresponding entry on the bank statement. These tend to be duplicates entered in error so will need to be removed.

Are you up to date with your reconciled items?

If you are able to log on frequently then, should bank feed issues arise, you will be able to narrow down the problem quickly. With daily bank feeds it is normal to have a few items showing on the dashboard that need reconciling, but these ideally should be kept to a minimum to get the most benefits from the software. It should be fairly straightforward to clear most of the payments going out as most of these will be regular payments and the auto-suggestion feature on Xero will do most of the legwork here. In terms of income, it can be difficult to identify some of this if there is little information provided, but by going through the unreconciled items regularly means you can query these soon after the payment is made.