ü Initial setup requires authorisation to link the Accounting Software with the Bank used by the client. There are 2 methods used to provide authorisation:-
Authority form signed by the client and sent to the Accounting Software company. This form is typically produced through the software and a different authority form is required for each bank or credit card to establish the bank feed.
- Provide your Online Banking Client ID# & password which is used by some accounting software to access & download the bank transactions from the banks online services. (Check your terms & conditions with the bank & review security)
ü After authorisation, you are required to create a link in the software between the respective bank and/or credit accounts set up for bank feeds and the appropriate account in the accounting software.
ü All Software allows changes to the bank feed setup including passwords.
J You are now ready to receive Bank Feeds !!!
Retrieving Bank Feeds
Transactions will either be automatically downloaded when you login or you are required to select the Bank or Credit Card you wish to retrieve & click on the update/retrieve button. You may be asked to key in clients login and password
Processing Transactions received
All software will download the bank feed transactions in to a bank feed transaction screen for the operator to either match, create or transfer transactions within the accounting file.
· Each Bank Feed Processing Screen will commonly show the bank feed transactions on the LEFT & the transaction that has been found or created in the software on the RIGHT.
· Upon download, all software will intuitively try & match bank feed transactions to existing transactions within the accounting file.
· The software uses the bank feed transaction field’s description, date or amount to provide a possible suggestion for matching.
With the remaining unallocated transactions either:- MATCH - Find an existing transaction within the accounting file. OR
CREATE - Create transactions with the accounting software, allocate an account, add a contact if required & define the tax code. This may include making a customer or supplier payment to clear invoices.
ü Create Rules
Most accounting software has the feature of creating rules which will enhance the automatic matching. A rule is a ‘criteria’ set that can automatically find a transaction, apply it to the account & add a description in the memo field. Some software will allow multiple conditions which helps to marry the bank feed transaction to the rule.
All rules require the following:-
- Rule Name – A name that resembles the transaction ie Merchant Fees
- Stipulate which Bank account the rule relates to
- Description: This description must match ‘some part’ of the bank’s description’ for the software to find the transaction & automatically match it to the rule See below ‘merchant fees example’ you would use MERCH FEE as the description in the rule
Bank Statement Description
MERCH FEE000044455566 ABC ARCHITECTS 00233
The rules within all accounting software will apply the rules on download of the bank feed transaction & either approve automatically or ask the operator to approve.
The Bank Reconciliation process differs once Bank Feeds are operational. All transactions downloaded will typically be flagged as ready for reconciliation within the Bank Reconciliation screen. Therefore, a bank balance at a point in time is all that is required to reconcile the bank.
Daily Bank Balance is either shown on the Dashboard of the accounting software or you are required to obtain the balance via online banking or statement.