Xero is a great tool for any business. The software offers features designed to make record keeping easy, minimising work for business owners and bookkeepers and providing a real-time snapshot of your business performance. To help you understand and interpret the financial data there are many reports available, all of which are easy to prepare and tailor to your own needs.

The bank feed

One feature which is key to ensuring the information in Xero is up to date is the bank feed. This enables Xero to connect directly to your business bank accounts, giving an automatic flow of information from your bank straight into the bookkeeping software ready to be reconciled. As well as providing up to date information for bookkeeping, it is also a great way to see and monitor the cash flow of your business.

The issue

However, the quality of the data you get out of Xero is dependent on the accuracy of the records put into it. Depending on the bank you use, the bank feeds need to be reconnected periodically as a security measure for the bank. In addition to this, unfortunately the bank feeds in Xero can occasionally go wrong and therefore need to be monitored on a regular basis. Sometimes the bank feed can cut out temporarily or disconnect entirely. If the records going into Xero are missing information then the quality of the data, and all the great advantages Xero offers, are lost.

The solution

Fortunately, the solution is really quick and easy: on a regular basis, you simply need to check that the bank balance in Xero matches the balance on your physical statement. To carry out this check, run the ‘Reconciliation Report’ which can be found towards the top right of your bank account feed, by the ‘Manage Account’ dropdown. Select the date to match the physical statement you want to check and the report will show you the bank balance in Xero, any unreconciled transactions you need to work through, and then the expected statement balance once these transactions are reconciled. The expected statement balance at the bottom should match the balance on your physical statement. If it doesn’t, then the chances are the feed has cut out at some stage. By performing this check regularly, the missing information can be identified quickly and added into the Xero records.

The bank feed is a great tool but it’s important to remember that we do need to monitor and maintain the software to ensure it’s giving us the best financial data possible. If you’re worried that your bank account has cut out and you’re not sure what to do about this, please don’t hesitate to let one of the team know and we’ll help to guide you through finding and correcting any issues.