Bank feeds have, since they were launched, emerged as a game-changer for small business accounting. There’s no longer the need to compare bank statements with accounting records in minute detail. Cloud accounting solutions like Xero offer secure, automated import of data from your bank transactions, simplifying reconciliation and providing real-time cash flow information.

Despite the clear advantages though, there are still some misconceptions about bank feeds, which can stop businesses enjoying the benefits. 

Xero recently highlighted the three most common myths they encounter on the subject, so we’ve summarised them here, in case they apply to you!

Myth 1 – Bank feeds are unreliable

This couldn’t be further from the truth! Thanks to the implementation of UK Open Banking in 2018, the UK now has very robust and stable bank feeds.

Since they were first available, we’ve seen how Open Banking has dramatically improved the coverage and quality of direct bank feeds. The process for connecting bank feeds in Xero has become increasingly seamless. 

There were some initial teething problems for early adopters, but these have now been largely eradicated. 

Myth 2 – Bank feeds aren’t secure

Security is understandably a top concern for many business owners. Xero bank feeds though are protected by multiple layers of security measures.

Xero is regulated by the Financial Conduct Authority (FCA) and employs bank-level encryption along with rigorously tested software and systems to safeguard data. 

Importantly, the process of re-authenticating bank feeds, which was frustrating for everyone involved, has been streamlined. Instead of re-entering your bank details every 90 days, you can simply ‘renew’ the bank feed within Xero, which is quick and hassle-free. 

Myth 3 – Digital bank feeds won’t save me time

Setting up any new feature can be daunting at first, but the process of setting up a bank feed in Xero is really straightforward and fairly intuitive, usually requiring just a few clicks of the mouse.

The direct link between your bank and accounting software, eliminates manual data entry, reducing the risk of human error, and frees up time. Xero says that users report saving up to 5.5 hours per week through the use of bank feeds and automated reconciliation matches.

Next steps…

You can find out more about Bank feeds, including how to set them up, by visiting Xero Central. Though the process of setting up the link is simple, Xero Support can help you if you have any problems. 

Though we could possibly help, they are a dedicated team whose support you are paying for in your subscription, who are trained to help you and have the capacity to do so. They can also double check that your bank is supported and let you know if any problem you experience is at the bank’s end rather than yours!