Open Banking for Xero
Under new EU standards scheduled to take effect on 14 September 2019, the way some banks connect to Xero will change. Open Banking is designed to encourage competition in the banking industry and to allow individuals more choice and greater control of their banking data and how it is used.
Existing Xero bank feeds, and those using the ‘Yodlee’ solution, will no longer be available and will cease to operate. Many of them will be replaced by new direct feeds using Open Banking. Some banks will offer a direct feed where one has not previously been available.
The new direct feeds will be made available in stages, beginning in late August. The sign up process for the new direct bank feed will require you to enter your online banking user credentials from within Xero. You will be required to renew this link every 90 days. For those clients that do not use internet banking, an alternative solution is available - for further details, please contact the office.
Please click here for the latest position on all bank accounts.
During this transition period, care will need to be taken to ensure that no bank transactions are either missed or duplicated in Xero. Below are some tips and advice on how to ensure the integrity of your bookkeeping data.
We strongly recommend that you run the report on a regular basis to confirm that the "bank statement" balance in Xero agrees to the actual bank statement balance. The "bank statement" balance in Xero is calculated based on the transactions sent to the software. If transactions have been missed or duplicated, then this will be incorrect. By checking that the balances match you will be able to confirm that the new direct bank feed is working correctly. Due to the fact that you will need to renew the link with your bank every 90 days it is best practice to run this report on a regular basis.
The Reconciliation Report can be found in several locations including in the "Manage Account" menu. Note that you should enter the closing date of your reconciliation in order for the data to be accurate.
If the report highlights a difference, please contact the office for assistance. If transactions have been missed or duplicated we will advise how to correct this.
Unfortunately it is likely that existing bank rules will cease to operate as intended. This is due to the fact that the information sent from the bank into Xero could be in a different format.
For example the "Payee Name" may now be contained within the "Description" field or via versa. Therefore, your bank rule will need to me amended.
Bank Rules can be edited from within the "Manage Account" menu.
Transitioning to Direct Bank Feed
It is likely that each users experience will be different, depending on which bank account they use.
Taking the scenario of a client who banks with Barclays. The existing bank feed stops working on 31 August, but the client takes no action until the end of their next bookkeeping cycle which ends on 30 September. We envisage that at this point in time the client will be able to login to Xero, open the "Manage Account" menu, activate the new direct bank feed by entering their online banking credentials and specify the date from which they want the transactions to be imported from, i.e. 01 September.
If you require any further information or have any queries then please do not hesitate to contact the office.