A bad feed undermines trust, credibility and sucks up time.
Automated bank feeds and the promise of reduced data entry are two of cloud accounting software’s biggest drawcards. Combined with filters that automatically categorise transactions, bank feeds save a huge amount of time.
Once you introduce the possibility, however remote, that a bank feed might be wrong – either omitting transactions or doubling them up – then the onus is back on the business owner, bookkeeper or accountant to verify that the information submitted is correct and complete. Goodbye, time savings.
Not all cloud accounting vendors collect data the same way and face the same risks. In yesterday’s story I wrote up recent examples of problems with bank feeds. Here is a little more detail about how it works.
MYOB pays New Zealand service BankLink to collect account information for LiveAccounts. BankLink has direct connections with over 100 finanical institutions and pays the banks for a company’s actual transaction record once approval has been given. BankLink called me this morning to say its method is 100% secure and accurate.
Unfortunately BankLink has only connected to Australia and New Zealand banks (it recently launched in the UK).
Xero and Saasu rely on US financial data provider Yodlee to broker feeds with over 1500 local and international banks. Yodlee gets permission from businesses to access their bank accounts and then automatically “scrapes” the online banking data so it doesn’t have to pay the bank for the information itself. This scraping process is where errors are introduced.
I understand Xero and Saasu can’t afford to create customised connections to the financial systems of every bank in Australia let alone in other countries.
What I find hard to accept is the failure to communicate bank-feed issues to users of their software who are relying on them to get those feeds right. If Yodlee finds an issue with a bank feed it should automatically tell Saasu and Xero when the feed was disrupted, when it came back online, and provide a confirmed copy of the transactions during the downtime.
Instead, the vendors have to check a feed’s status by giving Yodlee the name of the account, the bank and a specific timeframe.
Xero and Saasu reassured me that only a tiny percentage of customers were affected by bad feeds but this is not really comforting if you are responsible for maintaining an accurate set of books for a business. The issue has the potential to put a brake on the takeup of cloud accounting software.
Accounting firm AKA Group caught inaccuracies in several feeds last month which had changed without warning. CEO Anna Kyriacou says the firm checks the records of all its clients on Xero and Saasu every week to make sure “everything is going smoothly”.
But Kyriacou admits that the complementary service is not scalable for a firm with over 150 clients.
“If we had every client on the cloud we would spend all our time just reviewing the files. We wouldn’t make any money.”