Time is money – and yes, even going to your bank account to check whether that payment arrived or was sent could prevent you from concentrating on running your business. However, almost all online accounting solutions have figured out how to make banking easier: by establishing a connection between your bank and the software! In the following article you will learn how bank reconciliation between your bank and your software works and how can you save valuable time using it.
Establishing bank feed
If a bank feed is supported by your accounting solution, you can establish a near real-time information flow between your bank and your software. This means that by connecting your bank/PayPal account – or even accounts – to your software you can see when your outgoing invoices are paid and when you paid someone else’s invoices. If a bank feed is not supported you can still upload your monthly bank statements to your accounting solution in various formats supported by the software, including CSV.
Multi-currency? No problem!
No matter which currency your bank statement uses, it will not cause any trouble for your accounting solution: in order to avoid confusion the software automatically exchanges the amount in foreign currency to USD or any other currency you are using and your cashflow will be updated accordingly.
Reconcile only once, and enjoy the ride
The best thing about bank reconciliation in accounting software is that you only have to do it once. When your first bank feed arrives or your first bank statement is uploaded, you just have to explain each of your money transactions – which one is income and which one is expense – and the software learns to recognize them. So by the time your next bank statement arrives, the software will recognize similar transactions and will automatically categorize them based on your descriptions. Thus chances of typos and other manual errors can be reduced to the minimum, but if you need to correct something or you have more complex bank transactions, you can still explain them manually.
Automated cashflow
Each time a bank transaction is made and you have accepted those transactions after you matched up invoices and payments related thereto, your cashflow is automatically updated. Thus you can always see the incomes and expenses of your business in bank account charts and other reports.
Easy-as-a-pie payroll
If you have subscribed for the extra payroll services, the connection between your software and your bank becomes two-directional: when you initiate the online payroll process, you will immediately see the moment when your employees were paid as it automatically displays in your bank feed.
Unlimited accessibility
The best thing about online accounting solutions is that they often provide a handy mobile application and/or a mobile browser version for free. Therefore, whenever you have to leave your office, you can still check your cashflow with a single glimpse.
Make the right choice
Several banks – especially those abroad – do not allow clients to establish a feed between bank accounts and accounting software, therefore, always take the chosen online accounting software for a test drive before making the final decision.
Zoltán G.
Sander D.
