30th September, 2024
As a small business owner, you know that time is money.
One of the most effective ways to save both is by setting up bank feeds in your accounting software.
This article examines what bank feeds are, why they’re a game-changer, and how best to get them set up for your business success.
Bank feeds are secure, automatic connections between your bank account and your accounting software.
They work by importing your bank transactions directly into your accounting system, usually on a daily basis.
This means that every time money moves in or out of your connected accounts, whether it’s a deposit, withdrawal, or bank fee, the transaction details are automatically pulled into your accounting software.
This set up is like having a direct line from your bank to your books, ensuring your financial records are always up to date without any manual intervention on your part (or at least not much of it).
You can enjoy many benefits from setting up bank feeds for your business.
Gone are the days of spending hours and hours on manual data entry or downloading bank statements.
With bank feeds, your transactions appear automatically in your accounting software, freeing up reconciliation time that you can instead dedicate to growing your business.
Malinda Norman, an MYOB Product Manager, notes, “Bank feeds save business owners time as they automate the process of recording and reconciling transactions – it can actually save you several hours per week.
“Data entry errors are also reduced, resulting in a better user experience that’s more streamlined and efficient.”
Bank feeds are quick and easy to set up, too, as well as very reliable, thanks to seamless integration between MYOB and your bank accounts.
“Setting up a feed is an easy process,” Malinda explains. “All you need to do is follow the steps in your MYOB file. Once a feed is connected, bank transactions are automatically sent to MYOB, eliminating the need to manually enter or import bank transactions.
“Most banks send transactions on a daily basis allowing faster and automated matching and categorisation of banking data in your MYOB file.”
By reducing human error from manual entry, you ensure your books are not only up-to-date but also accurate.
Plus, bank feeds make it easier to quickly spot any unusual transactions or potential fraud occurring in your accounts, so you can do something about issues ASAP.
This focus on accuracy gives you peace of mind and helps prevent potentially costly mistakes in your financial records.
With bank feeds, you get a clear picture of your cashflow at any moment, helping you to make informed business decisions and avoid overspending in your business.
Up-to-date insights can be the difference between seizing an opportunity and missing out due to uncertain finances, too.
Whether you’re considering a new investment or managing day-to-day expenses, having current financial data at your fingertips is incredibly beneficial.
Come tax time, you’ll appreciate the simplicity that bank feeds bring.
With all your financial data in one place, preparing your Business Activity Statements (BAS) and tax returns becomes much easier.
This can reduce stress during tax season and potentially save you money on accountant fees.
Bank feeds significantly improve your ability to budget effectively.
By easily tracking your current expenses and income, you can create more accurate business budgets and forecasts, setting your venture up for financial success.
When you’re ready to begin the process of setting up bank feeds, these tips can help you:
MYOB supports most major Australian banks for bank feeds, but it’s always worth double-checking that feeds can be enabled between your financial institution and the MYOB platform.
Happily, though, MYOB does offer the best coverage in this department — the platform provides direct bank feeds for the largest range of financial institutions in Australia and New Zealand.
Keep in mind, too, that while many Aussie banks offer a bank feed service for free, some may charge a small amount for it.
Be sure to ask the financial institution(s) you deal with if there are any bank-feed-related charges involved that you need to know about.
Secure authorisation is, as you’d imagine, a crucial step in successful integration.
You’ll need to authorise your bank to share data with the MYOB accounting software, which usually involves logging into your online banking within the accounting platform.
While this process is designed to be secure, always ensure you’re using a secure internet connection when you complete it and use hard-to-crack passwords on all your bank accounts.
Note that all data on MYOB is protected with PCI DSS global security and MYOB is compliant with ASIC and banking rules.
Malinda adds, “MYOB Bank Feeds are secure and allow transaction data to be automatically fed through. However, there’s no ability for the software to access and transact on the bank account itself.
“Unlike some other accounting software providers, MYOB doesn’t use screen scraping for bank feeds.”
Another tip is to be strategic about which accounts you connect.
Set up feeds for all relevant business accounts, including transaction accounts, savings accounts, and credit cards.
However, try to avoid connecting personal accounts, as you’ll want to keep your business finances as separate as possible from your personal ones.
In addition, take the time to set bank feed rules correctly.
You can create rules for automatically categorising different types of transactions but need to do so with care to avoid errors or confusion in the future.
Getting the rules for your transactions set up right will save you countless hours in the long run and ensure consistent categorisation of all the transactions.
Malinda advises MYOB users to take a little extra care to check initial transactions after bank feeds are set up, too.
“The first bank feed that’s received and recorded in the MYOB ledger commences from when the bank feed is approved by your bank,” she explains.
“This means any transactions that occurred while waiting for the feed to be set up won’t be included. It may be necessary, then, to add in these transactions manually or import them from a statement.
“When setting up, it’s important to complete this bank reconciliation to ensure all transactions have been recorded correctly. Doing so will help avoid any duplicated or missing transactions.”
While bank feeds are largely automated, it’s good practise to review your transactions regularly to ensure everything’s in order.
Don’t just assume that your bookkeeping becomes completely hands-off, as bank feeds don’t eliminate the need for oversight.
Set aside time each week or month to check everything is categorised correctly and to keep an eye on your firm’s financial health.
While bank feeds are incredibly helpful, not all financial transactions will end up going through one of your bank accounts.
For instance, some cash transactions, owner contributions, or certain adjusting entries may need to be manually entered.
Forgetting such entries can lead to incomplete and inaccurate financial records, so use some of the time you save to handle such manual transactions.
Some people mistakenly think that if they use bank feeds to keep track of most of their digital transactions, they don’t need to keep any paperwork.
This is not the case, though, as you must retain original receipts and invoices, along with warranties and the like.
The ATO requires paperwork to be kept for tax purposes and you may need warranties or other purchase information to return faulty goods.
By embracing bank feeds, you’re taking a significant step towards more efficient, accurate, and insightful financial management for your small business.
It’s a simple change that can have a big impact on your day-to-day operations and long-term business success.
Stop wasting time on manual tasks. Get bank feeds set up and enjoy the best coverage you can get. Start your 14 day free trial today.
Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.
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