- Duplicate or missing transactions in bank feeds
- CBA, Bendigo Bank have more issues than other banks
- BAS agents still manually checking balances
One Friday morning BAS agent Louise McLoughlin sat down to reconcile a client’s bank accounts at the Commonwealth Bank (CBA) on Saasu, a cloud accounting program. The job should have taken under an hour.
But only two of the nine accounts, which had been updated by automated bank feeds, matched the balances in the client’s online banking screen.
“The other seven were all wrong. Very wrong. We’re talking thousands of dollars,” said McLoughlin of eBas Accounts, who had to go back through weeks of transactions. “I said to my client, I’m really sorry but here’s a bill for six hours, and he fell off his chair. He wasn’t happy.”
McLoughlin had a similar experience with Xero bank feeds with Westpac and Bendigo Bank accounts and further issues with feeds in Saasu. “Bank feeds just stop for days on end. Until you put your bank credentials in again it won’t start, and then when you do it dumps days of information in there,” McLoughlin said.
“It’s not good enough. It doesn’t make me look good but it’s not my fault and it’s not the client’s fault either.”
Bank feeds have been hailed as one of the great productivity benefits of online accounting software. However, ongoing issues with their reliability have caused some bookkeepers to view automatically imported transactions as a first draft rather than the complete statement.
Xero in particular has highlighted bank feeds as a key selling point for its cloud accounting software. The company denied it was overselling their reliability.
“We’re not trying to oversell the bank feed and say it’s a statement replacement. There’s no doubt that from time to time we get issues with bank feeds,” Chris Ridd, Xero’s managing director in Australia, said.
Issues with feeds were isolated incidents, Ridd said. Problems with the CBA occurred when it changed its banking platform but not all customers were affected.
Other bookkeepers contacted by BoxFreeIT said bank feeds were occasionally unreliable but had seen only a handful of issues. Despite the convenience of bank feeds, professional bookkeepers using Xero and Saasu continued to check imported transactions against statements.
BAS agent Kylie Short from Tilda Virtual found a new Xero client had overstated expenses over two months with their St George accounts due to doubled transactions. Short unreconciled the accounts and redid it with a paper statement to find the extra transactions.
“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” in Xero’s reconciliation screen, Short said. “There still needs to be some verification that what you’re doing is correct.”
However, Short was unconcerned about faulty feeds. “I’m not really worried because I’ll always pick it up. If it was across the board and everyone was doubling up then I would stand up,” Short said.
“Generally I think bank feeds are the bomb. They’ve stripped out a lot of the monkey work,” said Kim Sargeson, a BAS agent at iBas Accounting Solutions.
Sargeson, who has several clients on Saasu for the past year, has only had two issues with a bank feed in four months, both with the CBA. She called the CBA to discuss the problem but was “handballed around” between departments.
Sargeson rang Saasu’s support team who looked up the transaction date and asked her to call back immediately if it happened again. “Saasu were awesome,” she said.
Sargeson also checked reconciled accounts in Saasu manually for all clients by printing off a statement directly from the bank or using a paper statement sent by the client.
“If someone who hasn’t got those skills and practices, and puts all their trust into a bank feed, then I think it may cause problems,” Sargeson said. “It’s concerning that small businesses trust the product (accounting software) and the bank feeds” for their reconciliation.
Xero’s Ridd said bank feeds were reliable enough that checking with a source document was unnecessary.
“I’d never be sitting here saying you should do the bank reconciliation in the system and have a physical statement next to you – it defeats the purpose,” Ridd said. “What we have today works in the vast majority of places and is best practice. It’s usually pretty clear when things aren’t working and then we’re straight onto it, working with the bank in parallel and telling our customers of the situation.”
Xero has three full-time developers creating and repairing feeds and a dedicated team in the customer support responding to issues with existing feeds.
But it was unclear whether Xero could know if a feed supplied by financial data aggregator Yodlee had broken until Xero users complained to the support desk. Xero and Saasu used Yodlee to connect to banks with which they hadn’t arranged direct feeds.
Despite keeping contact with the banks, platform upgrades had could occurred without any notification, Ridd said.
“Banks normally advise us if something is causing an issue. There have been situations where a bank has upgraded its core banking platform and it caused the feeds to break. That was unforeseen by us,” Ridd said.
Experiences appeared to differ by bank. McLoughlin received a message from Saasu warning her that a feed from Bank of Melbourne had stopped. However, Westpac and the CBA didn’t send any warnings to the client or the bookkeeper.
Reliability not guaranteed
Bank feeds that were identical copies of bank statements were unlikely to appear soon, based on discussions with accounting software companies.
Even where accounting software vendors had direct feeds from banks they would never cover every product, Lehmann said.
“In the case of the CBA they have three sites, NetBank, CommSec and CommBiz. They have three forms of authentication, password, token and SMS. And they have probably a hundred-plus banking products when you include loans, accounts and credit cards,” said Marc Lehmann, CEO of cloud accounting Saasu.
“Supporting the CBA itself is a huge job. You’re just going to get failures in connection,” Lehmann said. The break in the feed could have been caused by the software company, the bank or the feed aggregator, Yodlee.
“Some of these things get fixed quickly and others take a week or two. But it’s often the nature of the beast. No-one could be 100 percent reliable,” Lehmann said. When a feed broke the cloud accounting software would “catch up” with the stream of transactions when it reconnected, though sometimes this was an imperfect process.
Bank feeds were still a boon for productivity for micro-businesses that created accounts from their data, Lehmann said. “But they do run the risk of missing stuff and that does happen,” he said.
Larger companies with 50 staff or more didn’t use the feeds because of the complexity of payables and receivables, Lehmann added. “More than half our customers don’t use bank feeds. It’s not a Holy Grail, it’s only for the tiniest businesses that want (the program) to do their BAS for them.”
Image credit: Xero