Regulations are why your bank feed requires reconnecting every 90 days. But even that is among the benefits of your business transactions and accounting now being sync-able.
Bank feeds allow your business bank account and accounting software to sync automatically, reducing admin, improving accuracy, and giving you a near real-time view of your company’s finances. The 90-day reconnection requirement is a security feature, not a flaw.
Having your business bank transactions automatically sent to your accounting software is one of the clearest examples of how digital tools have simplified life for limited company contractors.
Banking + accounting: They’ve come a long, long way together…
But how does business banking integrate with accounting software such as FreeAgent and Xero? Is it safe? And how exactly can it make financial management easier for contractors?
In this article exclusively for ITContracting.com, I will address these questions and more, starting with the underlying technology that makes it all possible – bank feeds, writes Aiste Krevneviciute, an acting vice president at Tide.
What is a bank feed?
When you integrate, or “connect” your bank account and accounting software, you’re setting up a bank feed.
A bank feed is a secure, digital connection that automatically sends transaction data from your bank account to your accounting software, usually on a daily basis.
Bank feeds use Open Banking technology and regulated standards to provide an encrypted connection that keeps your financial data safe.
How to set up a bank feed
Exactly how you set up a bank feed depends on who you bank with and which accounting software you use, but the process is broadly similar across the major providers.
Within FreeAgent, you’ll go to the “Banking” tab, select “Connect your bank,” and choose your provider. Next, you’ll go through consent and authorisation, which temporarily takes you to your bank’s website before completing the connection.
In the Xero platform, the process is almost identical, except the banking tab is called “Bank accounts” and you select “Add a Bank Account.”
Final and fintech steps
With both providers, the final step is to select a transaction start date. Most accounting software providers allow you to pull through up to 12 months’ worth of transactions.
This process can sometimes be reversed for those using a fintech provider.
If you have a Tide account, for example, you can connect to Xero from within the Tide platform itself.
Why do you have to give consent for a bank feed every 90 days?
To comply with Open Banking regulations, each bank feed is authorised for 90 days only.
You’ll get an alert a few days before the feed expires, prompting you to re-authorise within your accounting platform.
Be aware that the feed stops automatically if you don’t re-authorise.
This is a deliberate security feature designed to prevent unauthorised access and ensure you remain in control of your financial data.
Are bank feeds safe?
Yes. In addition to the 90-day re-authorisation process, bank feeds are subject to strict Open Banking security rules.
This means bank feeds are encrypted, used only by regulated providers, and your banking credentials are never shared directly with your accounting software provider.
Three benefits for contractors of bank-to-accounting software
So, bank feeds are secure and easy to set up.
But how exactly does bank-to-accounting software integration benefit contractors?
Here are three of the most practical advantages:
1) Less manual effort
If your bank doesn’t offer bank feeds, you’ll have to manually import your bank statements into your accounting software.
This means downloading an OFX or CSV file and uploading it into a separate system — time that could be spent on client work.
2) Fewer input errors
Manual imports also introduce risk.
Human error can creep in at every stage, and mistakes are often only spotted much later.
A bank feed transfers cleared transactions automatically, significantly reducing this risk.
3) Better financial oversight
Receiving transaction data daily allows your accounting software to perform automated bank reconciliations, categorisation, cash flow tracking, budgeting and invoice monitoring.
In practice, this gives you a much clearer and more up-to-date view of your company’s finances.
It also makes it easier to stay on top of obligations such as limited company tax and accounting deadlines.
Not using FreeAgent or Xero? Tide integrates with others too
If you’re not using FreeAgent or Xero, Tide integrations also cover Sage, QuickBooks, KashFlow and others.
Looking for a free limited company bank account, plus FSCS protection?
With Tide, you can open a free business bank account online in minutes with no monthly fee.
For a broader comparison of available options, see our guide to business bank accounts for contractors.
Up to £120,000 of your deposits are also FSCS-protected on eligible business bank accounts.
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