One of the initial time saving benefits you’ll experience with Xero is bank transactions feeding into Xero via a bank feed. Hamish Edwards’ one of the original founders of Xero describes bank feeds as ‘the secret sauce of online accounting solutions’. Bank feeds work by linking the business’s bank, credit card and PayPal accounts to Xero. Transactions that happen within these accounts feed into Xero either live or batched overnight depending on the financial institution.
Once the transaction has arrived in your software it needs to be coded. However once a transaction has been coded once, frequently you’ll find future similar entries recognise the coding rules and you’ll just need to confirm the suggested transaction. For example once you have allocated an account and tax code to a bank charge transaction all future bank charges with the same description will automagically suggest to be coded the same way. Of course if necessary the auto-suggested coding can be overridden.
To experience the benefit of transactions automatically pushing into Xero, it’s necessary to set up the bank feeds. There are thousands of bank feeds with numerous ways of activating them – technically they fall into two different types Direct feeds and Yodlee feeds. The activation methods is evolving and improving rapidly so I can’t give you a definitive method of how to do this. Some can be activated online (Yodlee), some require you to fill out a form and email it in and can you believe it – some need to be snail mailed them in! (Direct Feeds)
To activate bank feeds initially identify what bank accounts you’d like an active bank feed for in Xero. Note: Credit card feeds are set up online once the file is activated. You can check here what bank feeds work with Xero.
A bank form for every bank account for every organisation needs to be completed and authorised. This involves:
- Accessing and printing bank forms
- Filling out the bank form information
- Getting the relevant people to sign forms – which sounds simple but in reality this is typically the major hurdle in this process as the authoriser seems to be on a jet plane and not available to sign!
- Scan the forms. I prefer to see each individual forms scanned, and distinctly named, something like: BankAcronym_FileName_AccountNumber. This makes it easier to see what has submitted and follow up where necessary – see step 6.
- Submit forms. (If we’re working together copy me in on this email)
- Following up with Xero bank feed support to ensure they’ve received the documentation and everything is in order.
Any delay in this step has a knock on effect in getting Xero up and running. If I’m converting you to Xero, I want you to experience the full benefits as soon as possible. To do this I need to get the bank authorisation sorted out, and the authorisation part of this process relies heavily on the client
So if you are moving to Xero I encourage you to do this as soon as possible.