Connecting your bank to automated accounting

Almost every accounting automation depends on the bank connection. Reconciliation, cash position, receivables chasing, payment matching — all of it assumes the bank data is complete and current.

That makes the feed the foundation, and it is worth more scrutiny than it usually gets, because its characteristic failure is silence.

The three ways bank data arrives

Direct feed. The bank sends transactions automatically. Best option where available: current, complete, no manual step.

File import. You download a statement file and upload it. Reliable, and it depends on someone remembering. The gap between the last import and now is the period during which everything downstream is wrong.

Screen scraping. Software logs in as you and reads the screen. Works, and it is fragile — it breaks when the bank changes its interface — and it usually involves sharing credentials, which is worth thinking about carefully.

Where a direct feed is available, take it. Where it is not, a scheduled file import with a reminder is more robust than it sounds, provided somebody notices when it does not happen.

The silent failure

A feed that stops delivering does not announce itself.

Reconciliation looks complete. There are simply no new transactions to reconcile, so nothing appears unmatched, nothing errors, and the screen looks exactly as it does on a quiet day.

Meanwhile the cash position is stale, receivables show as unpaid when they have been settled, and any automated chasing is now going to customers who have paid.

The control: a check on feed freshness — an alert when a connection has delivered nothing for longer than normal for that account. Ask a vendor directly whether this exists. It is a small feature and its absence means a silent failure mode with no detection.

Practical habit in the meantime: when reviewing reconciliation, glance at the date of the most recent transaction on each account rather than only at the unmatched list.

What to check before relying on a feed

Does it cover every account? Businesses commonly have accounts nobody thought about — a dormant account, a foreign currency account, a card facility. An unfed account is manual by default and usually unreconciled by consequence.

How far back does history go? Most feeds provide a limited window at setup. If you need earlier transactions to clear a backlog, you may need a one-off import.

How current is it? Same-day, previous-day, or several days behind. Determines what your cash position actually means.

What is in the description field? This varies enormously by bank, and it is what matching quality depends on. A feed carrying the counterparty name and reference produces far better matching than one carrying a transaction code.

What happens when it breaks? Re-authentication requirements, and who is notified.

The reconciliation that catches everything else

One control, monthly, regardless of how good the feed is:

The closing balance per the feed agrees to the closing balance on the statement the bank sends you.

The feed and the statement are produced by the same institution, so they should never differ. When they do, it means the feed has missed transactions — and missed transactions are invisible in every other check, because you cannot notice the absence of something you never received.

It takes two minutes and it is the only check that detects incomplete data rather than incorrect data.

Payments, and where to draw the line

Some integrations read; some also initiate payments. The second is a materially different decision.

The reading direction carries limited risk — bad data produces bad reconciliation, which is correctable. The payment direction moves money, which is not.

Where payment initiation is used, the controls belong at the bank rather than in the accounting system: authorisation limits and approval requirements the accounting software cannot alter. A limit enforced by your bank holds even if your accounting system is misconfigured or compromised; a limit enforced only in the accounting system does not.

This is one of the few places where the useful advice is to deliberately keep a control outside the system you are automating.

Multiple banks and currencies

Businesses with several banks tend to have inconsistent feed quality — a strong feed from the main bank, a manual import from the second. The weak connection becomes the constraint, because reconciliation is only as current as the least current account.

Worth listing every account, how its data arrives, how current it is, and who is responsible if it stops. That list frequently reveals an account nobody had considered.

Common questions

What is the most important thing to check about a bank feed?

That you would notice if it stopped. A feed that ceases delivering does not error — reconciliation simply shows nothing new to match, so it looks complete while the cash position goes stale and automated chasing reaches customers who have already paid. A freshness alert is a small feature whose absence leaves a silent failure mode.

How do I know my bank feed is complete?

Reconcile the closing balance per the feed to the closing balance on the statement the bank sends you, monthly. Both come from the same institution so they should never differ, and a difference means the feed has missed transactions — which no other check can detect, because you cannot notice the absence of data you never received.

Should the accounting system be able to make payments?

It is a materially different decision from reading transactions. Reading badly produces incorrect reconciliation, which is correctable; initiating payments moves money, which is not. Where payment initiation is used, the authorisation limits should be enforced at the bank rather than in the accounting system, since a bank-side limit holds even if the accounting system is misconfigured.

What if my bank does not offer a direct feed?

A scheduled file import is more robust than it appears, provided someone notices when it has not happened — which is why a freshness check matters more in that setup, not less. Screen scraping works but is fragile to interface changes and usually involves sharing credentials, which deserves consideration rather than acceptance by default.

Related: automating bank reconciliation with AI · connecting sales channels to your ledger · keeping automated books healthy