One of the most prominent benefits of cloud accounting software is their ability to speed up everyday processing tasks and ‘Bank Feeds’ lead the way in simplifying one of the most important tasks, bank reconciliation.
The ability to link with your bank and upload transactions directly to your accounts software not only provides an instant way to save time in manual data entry but also ensures a complete and accurate list of all your transactions.
All of the main software providers, QuickBooks Online and Xero included, now provide for a variety of means in which a ‘Bank Feed’ can be implemented, depending on your bank provider and your desire to maintain a permanent link between the two.
A number of the largest banks have now signed agreements to provide ‘Direct’ bank feeds. This process requires a simple form to be completed and sent to your bank. Once processed, your bank will automatically send bank statement data to your accounts software on a daily basis without any need for you to remember to click an ‘update’ button periodically.
The traditional ‘Standard’ feed is much more widely available, with almost all UK banks providing a service where there is online banking available. For this type of feed, a connection to your bank is made through the software by entering your online banking credentials on a one-time basis (much as you would to access online banking itself) to establish a link between your software and your bank.
Once complete, an initial upload of statement data will be provided. Then, a simple ‘Update’ button will allow you to upload the most recent statement data as required. Re-entry of online banking credentials may be required from time to time to re-confirm your approval for the software to link with your bank.
In some circumstances an electronic link to a bank may not be the best option, either because of choice or due to availability with the bank provider. In addition, most new ‘Direct’ and ‘Standard’ feeds can only back-date so far thus the need for a one-off upload of data. Fortunately, a third option is available in the form of ‘file uploads’.
For this process, a download of statement data can be taken directly from an online banking platform or even typed manually into a CSV (Excel) format file, therefore giving an alternative for those without online banking facilities. The file is then uploaded to the cloud accounting software and the transactions are ready to process.
However you choose to upload your data, cloud accounting provides a great opportunity to save hours of manual data entry, no matter your banking arrangements.