Bank feeds are game-changing when it comes to small business banking. Using them will level up your business by automatically importing all of your account transactions into your accounting software. No longer needing to download and import bank statements, will save you saving you hundreds of hours of data entry and make your small business banking processes more efficient and simple.
Before incorporating bank feeds in your small business banking, it’s important to first learn how bank feeds work and why you should use them.
How Bank Feeds Work
Bank feeds allow users to sync their accounting software with their bank feeds. This means that any transaction that is made in your business bank account will automatically pop up in your accounting software. This will save you time and allow you to track all of your business expenses and income within your accounting software.
By using bank feeds you can choose how your bank interacts with your
accounting software. You can set up your bank feeds to automatically match up your expenses and income with corresponding invoices and customers. Giving your accounting software permission to link up with your bank will save time as you will no longer have to import your bank
statements. It also means that your business expenses and income will be logged and reviewed as they are processed. This saves you hundreds of hours of manual data entry as you review and match up each
transaction related to your business.
There are three types of bank feeds: direct feeds; Yodlee feeds; and PayPal Feeds. Which type of feed you can use will depend on your bank.
Types of Bank Feeds
Direct feeds are direct links between your bank and your accounting software. This means that your bank directly supplies bank feeds to your accounting software without any intermediary software stepping in.
This direct link is favourable as it is generally more secure. Many popular banks offer direct bank feeds, with approximately 70 banks and financial institutions supplying direct feeds to Xero and approximately
110 to MYOB. These include the four highest-rated online banks, Commonwealth, NAB, ANZ, and Westpac.
Yodlee is a useful provider to connect your bank to your accounting software if your bank isn’t online. They work with banks to retrieve your financial information and statements, then do the work of digitising them
in such a way that is compatible with your accounting software. While it’s best, in the long run, to switch to an online bank and use direct feeds, Yodlee can help bridge the gap if for whatever reason you can’t make
the switch to an online bank. When using Yodlee your accounts will be updated overnight.
The last type of bank feeds is PayPal feeds. PayPal feeds are ideal for businesses that predominantly use PayPal for business transactions. PayPal directly feeds your financial statements to your accounting software, automatically updating it every 12 hours. An added benefit to using PayPal feeds is that, your PayPal feed can be updated on request at any time. This allows you to access your banking records in real time.
How Will Using Bank Feeds Help Your Business
The thing that usually stands between business owners and levelling up their business is lack of time. Bank feeds will save you hundreds of hours by cutting down time spent reviewing purchases. Linking invoices to income, and inputting data, can also be cut down with bank feeds. This saves you time that you can spend on other parts of your business.
By making all of your small business banking real-time accessible, you can monitor your progress and see transactions immediately. Knowledge is power, you can then start to make business decisions based on real time data.
Using accounting software and linking it to your bank creates foolproof records of your financial year.
Every transaction will be instantaneously accounted for, making it easy to review for tax time.
Check out Module 5 of our free Level Up digital upskilling program and learn everything you need to know about online banking for small business.
Please note; this information is general in nature and all financial matters relating to your business should be discussed with an accounting or finance professional prior to you making a decision.
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