 Zero Accounting Software 2023, setting up bank feeds. Get ready to become an accountant hero with Zero 2023. Here we are in our first award from our sponsor. Well, actually, these are just items that we picked from the YouTube Shopping Affiliate Program, but that's actually good for you, because these aren't things that we're just given to us or some large corporation which we don't even use in exchange for us selling them to you. These are things that we actually researched, purchased, and used ourselves. Ugg Slippers. I usually walk around my home in just my socks, but I wanted a high quality pair of slippers that didn't have a heel on them so I can slip them on easily, give me a little bit more warmth than just my socks provide, and which has a sole on them so I can deal with messes in the home such as spilled liquid or broken glass without getting my socks wet or my feet cut up, and the Ugg Slippers do a great job with that. I like the quality of the slippers. They feel like they're going to last a long time. They will probably outlast me, so I recommend the Ugg Slippers. Ugg Slippers.com or accountinginstruction.thinkific.com where we have many different courses. You can purchase one at a time or have a subscription model giving you access to all the courses, courses which are well organized, have other resources like Excel files and PDF files to download and no commercials. We're custom zero homepage. This time we're going to be going into the demo company file instead of the bank feed file. The demo company file already having information in it so we can look at the bank feeds that have been set up and then we can go into our bank feed file and think about how we would set them up from scratch. So let's go into that demo company file. When we're looking at the bank feeds, they are clearly connected to the bank accounts. There's a couple different ways we can look at the bank accounts. One is we can go to the accounting dropdown and look at the chart of accounts. So if we go into the chart of accounts, we see that we have our checking account. That's going to be the top account and the bank type of account is going to be the bank account. We have them listed out up here. You can look at them, assets, liabilities. The checking account is an asset type of account, but those bank accounts are special type of accounts because they have the capacity to be able to connect to the bank as opposed to other, say, current asset type of accounts, for example, which don't have that connection to the bank capacity, possibly also like credit card accounts being able to be connected to the bank. So when you add a new account, you might think, hey look, if I don't have a checking account here, I would add the account up top, but when you select the dropdown for the account type, you don't see generally the checking account because the checking account has that special characteristic. So we're going to close this back out. So when you add a bank type of account, Xero basically assumes that you're going to be connecting that bank type of account to the bank feed. So you could do that here. Add a bank type of account here and then it goes through the setup process to actually find the bank that you're going to be adding because Xero assumes that you're going to be connecting it to the bank. Now if you don't want to connect it to the bank, then you can still kind of like locate a bank and set it up, but tell Xero don't connect it to the bank. So you could still create like an account for the checking account without actually connecting it to the bank if you do not want to. Accounting dropdown. So we're going to go back into our chart of accounts, so back into the chart of accounts and just to note that that's different adding the bank account then to add another type of account. Now once the bank account, so you could add like the bank feeds and the bank account from here. This is one place that you might go, but more likely you're going to hit the dropdown and you're going to go into the bank accounts up top because once the bank accounts are set up, they have basically their own home over here. So now we've got the accounts that have been set up for this particular company. We've got the checking account and we've got the savings account. If you wanted to add another account from here, you could once again do it from here as well. So if you haven't connected to the bank, you could do it from this location or the chart of accounts add the bank account. And so then this is also where you can transfer money. Look at the bank rule, uncoated statements. So if I hit the dropdown up top, we can go to, I usually go to our, not the transfers, the account transactions. So we go into our account transactions up top and you get this four tab screen. So you've got your reconcile on the left hand side and then this is trying to match out what comes in from the bank feeds to what's going to be on our books. We've got the bank statement information. So this is going to be the information that is being pulled in from the bank and then we've got the account transactions and the account transactions are what we have entered on our side of things. So again, it kind of depends whether or not we're going to be constructing this from the bank mainly or if we're using the bank fees as more of a reconciliation type of thing. You can see the reconciliations on the left. So on the first tab, that's the tab that you could often go to help you to reconcile your transactions or create the transactions as you do the data input. And you also have the capacity here on the cash coding in another format of the screen, which is a little more streamlined formatting of the screen. All right, so that's the general process. So we just note that once we connect to the bank, we're going to end up with the information in essence in this bank feed limbo situation. That's what I call it bank feed limbo. In other words, it has not yet been used while it's in here to create or double check through reconciliation the financial statements, the balance sheet and the income statement. It's just been pulled in and is in this holding zone right here, which I call bank feed limbo and we have to pull them in from limbo to the promised land of creating or verifying the financial transactions. So if you're constructing most of your books directly from the bank feeds, then what's going to happen is you're going to have these transactions on the banking side, but you're not going to have anything to match it to because you're building your transactions from the bank. So in that case, you're going to start to build your transactions and hopefully your rules and whatnot so that you can automate more easily going forward from the transactions that come in. On those transactions, if you're using the bank feeds more as a reconciliation process, then you'll have more of this kind of reconciliation thing where you will already have inter transactions that you need to tie out or match to the bank feeds. So that's the general idea that we're going to pull it. So when you connect to the bank feeds, you want to imagine you're not done at that point in time. You're going to end up with this basically this bank feed limbo situation and then you're going to think about how you're going to pull that information into your system from there. All right, so let's go back to our account. I'm going to hit the drop-down up top and let's go into my zero and I'm going to go into the bank feed file. Let's go into the bank feed file and then we can add the new account so we don't have an account yet. So if I hit the accounting drop-down up top and I go, let's just check out the chart of accounts and the chart of accounts. We don't have anything yet, so zero doesn't normally set you up with a cash account because usually they want you to add the bank feeds when you set the cash account up. And then up top we can also go into it here and look at our bank accounts and we don't have anything yet in the bank accounts. Now for us, what I would like to do is create the checking account but instead of pulling the information directly in from the bank feeds, I want to upload the information imagining that we'll get it and we'll talk about how to do that in a future presentation but pulling the information from the bank account or the bank account online, for example, your bank into a CSV file or a data file that we can then upload into the accounting system. Now, why would you want to do that in practice? Sometimes the bank feed is faster, clearly, so it's the easier thing to do. However, sometimes you can only go so far back with the bank feeds. So if you're not able to go far back enough, sometimes you can get more data by actually downloading the data files from your financial institution and then uploading them into the zero system. It's also a nice practice tool to be able to set up an account and then you can practice even setting up your own data with a CSV file or downloading information from the bank so that you're not actually connecting to the bank as you practice the bank feeds. That's our primary objective here that we would like to kind of imagine we're connecting to the bank feeds without actually connecting to the bank feeds. So those are the two methods that basically you can use. So what I would like to do then is add an account and it's going to try to go through the methods of me connecting to the bank, but I'm going to say no, don't actually connect to the bank, and then we're going to download the transactions from our financial institution or imagine we download them from the financial institution and upload them into the zero accounting system. Once done, we will be in the same spot that bank feed limbo as we would have been if connecting to the bank. So either method will get you to that same kind of spot where you'll have all the information from the bank in the system in bank feed limbo that you can then practice adding to the system or actually add to your accounting system. So I'm going to add a bank. Now normally if you were going to connect to the bank the next step would be searching for the bank. So let's say Wells Fargo is our bank. Wells Fargo. So I'm going to say Wells Fargo bank. I'll say US. Now zero has a pretty wide range of financial institutions. So at this point in time it's pretty likely that you'll be able to find your bank if you're in a big, if you use a fairly large bank. And they're getting more and more banks that are able to connect. But if you have a very small bank you could check it out to see whether or not zero will be able to connect to it. But it's getting to the point now where a lot of financial institutions have this connectivity but if they don't then again you might be able to use this upload kind of process downloading the information from the bank and then uploading it. So it says here automatically import your files, your Wells Fargo transactions, connect your account by logging into your financial institution. Transactions will be automatically sent into zero. Now that would be great and if you were connecting to the bank you would say log in and move forward. Now from that point in time your bank of course is going to want to have security measures. So those measures will be different possibly from financial institution to financial institution. You will at least have to, you would think log in to your bank, right? That would be the minimum type of measure. But usually those are not too tedious. You might actually have to call the bank in some cases but not usually. Usually you can get verification logging into the account and be able to verify the account and make the connection. So usually that's not the difficult thing about doing the bank feeds is the connection process. It's going to be adding the information from Bank Feed Limbo. However we're going to skip that here because what we're going to do is simply upload the information from the bank. Now you do need to populate this stuff in order to how you can't like leave it blank. So I'm going to say this is checking account and account type. So I'm going to say this is going to be every day, day to day checking. I'm going to put in just a random number because it forces me to do it. And then we're going to say it's in US dollars. That's the one we can save and add another or just save and continue. I'm going to save and continue. So there we have it. So now we have the same kind of little tag down here showing that we have our bank account set up. It's also going to be in our chart of accounts. So if I go to the account dropdown and I go into my chart of accounts. We see our checking account has been set up here as well. Let's go back in here and see if I can add a account number. So I'll add a code 1 1 0 0. Let's say and there we go. So there we have our checking account. If I go back into my accounting dropdown and my accounts and just take a look at the dropdown here and look at the account transactions, then of course we have our tabs up top and we don't have any data in the tabs thus far because we haven't entered any transactions on our side, nothing on the account transactions side, nothing on the bank side of things and the reconciliation would be zero's attempt to combine those two things. So in a future presentation, we'll imagine a process of pulling the data from the bank in a format that can then be uploaded into the system. We will upload the data into our zero system so that we will then be in bank feed limbo here having the transactions from the bank just like if we were connected to the bank and ready for us to practice bank rules and bringing those transactions in from bank feed limbo to the promised land helping us create the financial statements and possibly verifying helping us with the bank reconciliation process.