What a bank feed is and how transactions get into your software
A bank feed is a connection that copies the transaction lines from your bank account into your accounting software, so you don't type them in. That's all. It doesn't decide what each line means.
What you need before a feed works
- A bank account that your software's maker says it can connect to. Check the maker's own help pages.
- An account set up in the software to receive the lines.
- Whatever setup the maker asks for, which may include linking each software account to the matching online bank account1.
Some software goes through a data provider in the middle. Microsoft's Business Central manual says that to import statements as bank feeds, you must set up the Envestnet Yodlee Bank Feed service1. Other products use other providers or direct links. Look up your own product.
What travels along the connection
Open banking is one way banks share data with software. It allows financial data to be shared between banks and third-party service providers through application programming interfaces, which are agreed ways for two computers to talk2.
What arrives is a list of transactions: a date, an amount and a description. In Business Central, those lines land in a pane called Bank Statement Lines. The manual describes them as coming from an imported file or stream provided by the bank1. Wiise's help describes its online bank feed for Australia and New Zealand, where statement lines can download into your reconciliation automatically3.
Not every connection brings the same amount of data. One reference notes that an aggregation service only lets the software view an account balance, not actual transactions4. A balance-only link can't fill your list of lines.
Feed lines aren't the official statement
The bank's official statement comes later. Banks also offer a non-official transaction history before the official statement is produced4.
What the feed doesn't do
It doesn't record the sale or the bill. Your invoices and bills are separate records. The feed gives you the bank's side only.
It also doesn't prove your books are right. A feed can bring in every line and your own records can still be missing a payment. That's the gap a reconciliation is for. If the word is new, read what reconciliation means.
Questions to ask about your own setup
- Which bank accounts and account types can the software connect to?
- Does the connection bring in transactions, or only balances?
- How do you reconnect if it stops, and who at the business can do that?
- Can you import a file instead if your bank isn't covered?
The answers sit in the maker's help pages, not on this site. Read the current version, because supported banks and menu names change.
Each line then needs a home. You can match it to something already in your books, such as an invoice you sent. Or you can sort it yourself, or let a rule do it. The next pages cover that:
Menus and supported banks change, so read the current help pages for your own product.
Sources used
- Reconcile Bank Accounts, Microsoft Learn (Dynamics 365 Business Central)
- Open banking, Wikipedia
- Do a bank reconciliation, Wiise Knowledge Base
- Bank statement, Wikipedia
Keep reading
What bank reconciliation means and why businesses do itBank reconciliation compares your records with the bank's. Learn what the two sides are, what should agree, and why differences appear.
How software matches bank lines to your recordsAutomatic matching compares bank lines with records you've entered. See what it looks at, why it suggests a match, and when to check it yourself.
Bank feed or statement file import: how they differNo feed for your bank? You can usually still reconcile from a downloaded file. Here's how a feed and a statement file import differ.