Real-time credit card feeds

We Asked CXOs, CPAs, and Others The Challenges SMBS Face By Relying On Direct Bank Feeds. Here’s What They Said

March 5, 2024
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In this Article

While direct bank feeds might seem like a dream come true for credit card reconciliations, there are some hidden dangers might lurk beneath the surface. 

From the strategic perspective of COOs to the entrepreneurial insights of Co-Founders, we've gathered expert opinions on the pitfalls of relying on direct bank feeds for credit card reconciliations. From delayed transactions throwing off your finances to misplaced trust causing chaos, they reveal the potential pitfalls that many businesses miss.

Here’s what they had to say.

Delayed Posting Affects Reconciliation

A challenge businesses may face with direct bank feeds for credit card reconciliations is the potential for delayed transaction posting. In some cases, the timing of transactions appearing in the bank feed may not align with the actual transaction date, causing discrepancies in the reconciliation process. This delay can impact the timeliness of financial reporting and decision-making, as the accounting team may not have real-time visibility of the company's current financial position.

A CFO managing a small- to medium-sized business notices that transactions from credit card expenses do not appear in the bank feed until several days after the actual purchase. This delay creates a lag in reconciling expenses and may lead to inaccuracies in cash flow projections and budget planning.

Danielle Roberts, Co-Founder, Boomer Benefits

Inadequate Metadata in Bank Feeds

Bank feeds tend to have extremely poor metadata. As a result, they do not provide enough identifying information about specific charges, which leads to a lot of wasted time in reconciliation and closing the books. Some platforms, like Stripe, have tried to improve this process. However, to this day, bank feeds always have this issue, and I have not found a great way around it.

Trevor Ewen, COO, QBench

Misplaced Trust in Bank Error-Checking

As a tech CEO, I've noticed that bank feeds can introduce a "phantom reliability" issue. Businesses imagine they've outsourced error-checking to their bank. They forget the system operates on their bank's definition of "error." If a transaction is legitimate per their internal controls but against the bank rules, it will be reported as an error. This could lead to unnecessary complications and disrupt the smooth functioning of expense management.

Abid Salahi, Co-Founder and CEO, FinlyWealth

Timeliness Challenges

Relying solely on direct bank feeds for credit card reconciliations poses several challenges for businesses. Firstly, latency issues can delayed transaction updates, hindering real-time visibility into financial data. This can result in inaccurate financial reporting and decision-making. 

Antoni, Founder, Breezer Freezer

Incomplete Data From Connection Failures

The main challenge, and one that I have experienced from this, is the frequency of connection failures. The connection failure leaves businesses with outdated or incomplete data. When the data sync fails, it results in discrepancies in the financial reports. So, getting an accurate picture of the business's financial health is hard. We once had a reconciliation issue when our bank feed did not update over a weekend. There was a discrepancy between the bank statement and our internal records, and we spent a lot of time trying to rectify the error.

Miles Brooks, Director of Tax Strategy, CoinLedger

Manual Oversight Is Always Needed

Despite using direct bank feeds for credit card reconciliations, businesses often need manual intervention to address discrepancies and ensure accuracy. The automated systems handling these feeds may struggle with unclear transaction descriptions or differences in coding conventions between the bank and the business. 

This requires human interpretation to properly categorize expenses and match transactions. The expected efficiency gains from automation can be compromised, leading companies to allocate additional resources for manual oversight. 

Gideon Rubin, CEO and Co-Founder, YourIAQ

Why Should You Choose Fyle’s Real-Time Over Direct Bank Feeds?

While direct bank feeds offer a level of convenience, their shortcomings are often severe. Delays, missing details, and misplaced trust can lead to inaccuracies, inefficiencies, and even security concerns. Here’s how Fyle’s real-time solves the problem:

Real-time Visibility, Real-time Decisions

Fyle's real-time feeds directly connects with credit card networks like Visa, Mastercard, and American Express to give you access to real-time card transaction data. 

Employees are notified via text message each time they swipe the business credit card. They can reply to this message with a picture of the receipt, and Fyle will auto-match it to the correct card transaction. Receipt collection and reconciliation can be completed in less than 2 minutes, with zero manual effort!

*85% of Fyle users submit their receipts right at the time of purchase.

Richer Data, Fewer Headaches

With Fyle, you get updated real-time information into organization-wide card spend. 

Fyle's spend dashboard gives you real-time info on spend data, empowering businesses with real-time insights to effectively track expenses, identify trends, and make informed financial decisions.

Enhanced Security and Control

Fyle automates compliance and ensures you’re always protected from fraud.

Fyle's real-time feeds immediately detect suspicious and unauthorized spending, notifying accountants instantly. This empowers quicker action and simplifies fraud detection, ensuring businesses stay compliant and protected.

Also Read:

Why Should You Choose Real-time Feeds Over Direct Bank Feeds?

In Conclusion

Access real-time card transaction data without switching your existing credit cards or how you work. Schedule a demo today to find out how Fyle’s real-time feeds can change how you manage your credit card expenses.  

Effortless expense management for all business spends. Earned time, saved costs, improved productivity, happy employees - achieve it all with a single software.

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