What is a bank feed?

Definition

A bank feed is the automatic import of bank transactions into the accounting records. Those lines are deposits, withdrawals, and card charges the bank already posted, pulled into the books so they can be matched to the right accounts.

The feed itself is not a journal entry. It is a queue of bank lines waiting to be accepted, matched, or coded.

Where it shows up

Balance Sheet: Related to cash lines waiting to be matched.

Cash flow: Related to the same deposits and withdrawals the bank already posted.

P&L: Related to nothing extra.

See also: Bank Reconciliation · Bank Statement · Posting

When you look at the Balance Sheet, cash changes only after an imported line is matched and recorded in the cash account. Until that happens, the line sits in a review list, not as its own caption on the statements.

You will not find a feed heading on the Income Statement. Income and expense move only when a matched line is coded to those accounts.

The Statement of Cash Flows reports the same deposits and withdrawals the bank already posted. The import is how those movements enter the books, not a second cash event.

In the bookkeeping app, the queue is usually a screen next to the checking or card account. A long unmatched list means book cash has not yet caught up to the bank.

How it works

The bank sends a file of posted transactions on a schedule, often overnight. Each line carries a date, an amount, and a short description written by the bank.

A person then works the queue. They match a line to a book transaction that already exists, or they assign the line to an account and a payee.

Matching does not move cash a second time. It records the bank's already-posted line in the ledger so book cash can agree with bank cash.

If a line has no match, it stays unmatched. Unmatched lines are not yet in the accounts that the statements read.

Many apps suggest an account from a past similar description. That suggestion is a hint, not a proof, and a wrong accept will sit on the statements until someone fixes it.

Checking accounts and card accounts both use this import. A card feed brings charges and credits in the same way a checking feed brings deposits and withdrawals.

The organized list of accounts is what those lines get coded to. A deposit coded to the wrong income account will overstate one caption and understate another until it is recoded.

After the queue is clear, the remaining work is to explain any gap between book cash and the bank's ending figure. That later matching worksheet is a different step from the import itself.

Example

A florist also keeps the books for the cafe next door. Each morning the bookkeeping app pulls yesterday's cafe card deposits from the bank.

Monday's queue shows three deposits: $420, $380, and $510. The florist matches each one to the cafe's sales batch from the prior day.

No extra cash moved when those lines were accepted. Book cash rose because the bank had already received the card money, and the import was the way those deposits entered the books.

A $28 monthly service charge also appears. The florist codes it to bank fees instead of matching it to a sale.

A $1,200 bakery payment shows as a withdrawal. The florist matches it to the bill already entered, so cash falls once and the amount owed the bakery is cleared.

After the queue is empty, Monday's book cash can be compared to the bank's Monday figure. Any leftover difference is a later matching problem, not a second import.

Common mix-ups

The import is not the bank's period report. The bank's period report lists every transaction and the ending balance for a month, while the feed is the ongoing stream of the same lines.

Importing a line is not the same as recording it in the ledger. The line sits unmatched until someone accepts it into an account.

Do not treat every imported deposit as new sales. Card deposits often match sales already recorded, and accepting them as new income would double both cash and sales.

Related terms

• Bank Reconciliation: Matching the book cash balance to the bank statement and explaining every difference.
• Bank Statement: The bank's period record of every transaction and the ending balance.
• Journal Entry: A dated record of debits and credits posted to the ledger.
• Operating Bank Account: The main checking account through which day-to-day receipts and payments flow.
• Credit Card Payable: The balance owed on company credit cards at period end.
• Posting: Recording a journal entry into the general ledger accounts.
• Chart Of Accounts: The organized list of every account used to record transactions.
• Audit Trail: The traceable chain from a reported number back to its source document.