Bank Feeds are changing!
Open Banking is the UK’s response to new EU banking industry standards. Under Open Banking, bank feeds will need to change how they connect to bank accounts to adhere to new regulations, effective on the 14th September 2019.
Whilst Quickbooks, Sage, FreeAgent etc will all be affected, at the moment, Xero’s stance is far more comprehensive in terms of support and explanation for its users, as follows:
There are new feeds being developed by the banks, and many users will be able to simply swap to the new feeds. Some new feeds won’t be ready for the 14th September though, and users who use these banks will need to manually import their bank statements until they are available.
How will I know if my bank feed is affected?
Xero have announced that affected users will receive a notification on their dashboard when they need to make the change. There will be a ‘Update bank connection’ link, from where you will need to follow the prompts. Here is a Xero video for more information about how to update your connections.
Quickbooks have set up an FAQ page which explains how they will manage the transition. Affected users will receive a notification within their system and an email to let them know when the new feed connection is available.
How do I know if my bank is ready with a new feed?
Xero has a page in Xero Central that will be kept up to date with progress for each bank. This includes a summary of the different types of accounts affected and the action required by users. You can see that table here.
Quickbooks will email users when their new feeds are available.
How do I manually import my bank statement to Xero?
You’ll need to download your bank statement from your online banking in OFX, QIF or CSV format. Once downloaded, you can import this file into Xero. The full process will depend on the format of the file you have downloaded, but you can find step by step instructions in Xero Central.
Quickbooks has a helpful video to take you through the process of importing your bank statement.
What happens if I don’t swap to the new feeds?
Your existing feed will stop, your transactions will stop being imported into your system and you’ll lose the benefits of having a bank connection, such as easy bank reconciliation. Far better to swap as soon as possible and be able to keep everything up to date.
Importing bank statements takes longer; do I have to do it?
Of course, the answer is no. You don’t have to import your statements and eventually the banks will get the feeds into place. You could wait until that happens, and then bring in all of your missing transactions. If you don’t import your statements though, you won’t have a clear idea of where your business is. You won’t necessarily know who has paid you, and may send payment reminders to those that have paid you.
We would strongly recommend that you check the situation with your bank, and work out your process for importing your bank statements regularly if you need to do so. The more you keep your system up to date, the better the information that you can draw from it.
What else might I need to consider?
- You may need to review existing bank rules within your system as the way Xero maps the bank statement will change. If your bank rule contains the condition of ‘Reference contains’ then you’ll probably need to edit the bank rule.
- Under the new regulations, the bank feed will need to be updated every 90 days, for which you’ll be receive a dashboard reminder.
As ever, if you’re unsure about your bank feeds, how to connect them or have any other questions, please do get in touch. Whilst the support teams for the appropriate package are the experts, we’re happy to help if we can!
We’ve concentrated on Xero and Quickbooks in this article, as those are the primary systems in use by our clients but if you use a different system and need help, please shout. We also have clients using Sage and FreeAgent, amongst others, so are familiar with these systems too. All will be affected by the change in banking regulations.