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Monday 20 May 2013

Bank Feeds - How to check if they are reliable

Bank Feeds - How to check if they are reliable  
Bank feeds - revisit the approach to relying on feeds and how BEST Practice Bookkeeping makes it simple

It has been reported of late that Bank feed downloads are missing transactions causing a nightmare for reconciliations. This is not new, I recall experiencing the same problem when downloading bank transactions history reports. So what do we do?
It appears that all of the software incorporating Bank Feeds are UNABLE to do an independent check that; the calculated balance is in fact the balance of the bank account. Therefore the reconciliation process from totally within the programs are only checking the balance against itself - not a true reconciliation.
It’s important to remember ‘Bank Feeds’ is just a tool therefore the integrity process ‘the old school approach’ of bank reconciliation to the bank statement should remain even if the cloud software has provided a bank balance to reconcile to.

An article in BoxFreeIt outlines this issue well. A bookkeeper experienced missing transaction and has stated “The only way I would have found it is because I’m still old school about bank recs. I don’t believe in just ticking the green boxes”, “There still needs to be some verification that what you’re doing is correct.”

Best Practice Approach
Bank FeedsMATCH all transactions in Bank Feeds before attempting Reconciliation
REMEMBER: if you delete a transaction you MUST return to Bank Feeds to match again
RECONCILE to bank balance provided by software or online bank balance
CHECK reconciled bank balance with original bank statement provided by bank
IF difference do a manual check against bank statement
RUN Bank Reconciliation Summary to help understand the difference

In summary, a bookkeeper’s role is to be the ‘integrity police’ and understand all financials figures. Therefore always treat software as a tool for efficiency and run checks to prove what the software reports. These checks include:
  1. Check Software Bank Balances to original or online bank statements
  2. Check money left in cash drawer or petty cash
  3. Run Bank reports to clarify the balances
Don’t just trust the downloaded bank balance provided by the software

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