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BJG Accountants in Braintree Essex

Advice On Online Bookkeeping Bank Feeds

In my previous blog concerning online bookkeeping systems I referred to the issue of online bank feeds and in this blog I will address this in more detail.

Bank feeds are now a common feature of online bookkeeping systems and are a significant improvement in terms of simplifying and reducing time spent on bank reconciliations.

This is because the bank accounts on the online system are updated in real time direct from the relevant bank account and can be viewed immediately. This dispenses with the need to download the bank statements in file format and then upload to the bookkeeping system.

Furthermore, most of the software products feature an ability to match and assign transactions to supplier and customer invoices and also memorise non-ledger bank transactions.

However, an issue that has arisen and been reported on elsewhere is that in most systems the bank feeds are powered by a third party provider.

This raises the question of whether your bank’s terms and conditions cover the use of third party software and therefore whether a particular bank will not accept liability in the instance of any breach of security arising from the use of a bank feed.

Therefore, it is important to check with your bank as to the status of your particular bank’s terms and conditions.

The good news is that many banks (particularly the major banks) have or are in the process of updating the terms and conditions in response to the issue being raised by customers using or intend to use the bank feed facility.

Furthermore, some of the major banks are in the process of developing their own direct bank feeds, which will avoid the problem of where responsibility rests for bank security when using bank feeds.

It should also be pointed out that if using the direct bank feed is not an acceptable option based on the above considerations, it should still be possible with the more common online systems to use the ‘old’ system of importing the downloaded bank files (details of this should be on the system help site), and still use the ‘matching’ facility and reconciliation features to gain as much benefit from the online system.

It remains to be seen how long it will take the banks to completely clarify the situation, but it is reasonable to predict that online bank feeds are here to stay and that as thousands of businesses are now using online bookkeeping systems, and bank feeds are a major feature of these systems, the issue should be resolved satisfactorily.

For further advice and assistance on your bookkeeping needs please contact BJG Accountancy on info@bjgaccountancy.co.uk

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