Xero Bank Feeds Basics

Most messy Xero files start the same way: the bank feed broke, nobody noticed for a few weeks, and the books quietly drifted away from what was actually happening in the bank account. Once that gap opens, every report built on those numbers becomes unreliable.

Bank feeds are the plumbing of Xero. They are also the part most likely to fail silently, which is why they deserve more attention than they usually get.

What a bank feed actually does

A bank feed imports copies of your bank statement lines into Xero, usually overnight. Depending on the bank, it is either a direct feed supplied by the bank itself or a connection that retrieves transactions on your behalf. Direct feeds tend to be more reliable; connection-based feeds are more prone to dropping out when the bank changes something at its end.

Statement lines are not your accounting records. They sit on the bank side of the reconciliation screen waiting to be matched or coded. That is why each bank account in Xero shows both a statement balance, built from the imported lines, and a balance in Xero, built from your accounting transactions. When everything is healthy, the statement balance agrees with your actual internet banking balance.

How feeds break

Feeds stop for mundane reasons: the bank updates its security, you change your banking password, the connection authority expires, or the feed reaches the end of its renewal period. Xero usually shows a warning on the dashboard when a feed needs attention, but the warning only helps if someone is looking.

The real trap is what happens next. A repaired feed generally does not backfill the gap. Transactions from the broken period simply never arrive, and the fix is manual: export that period from internet banking and import it into Xero as a CSV or OFX file, then reconcile as normal.

The duplicate trap after re-linking

Reconnecting or replacing a feed can do the opposite: pull in statement lines that already exist. Reconcile the duplicates as well as the originals and income and expenses are counted twice, with the GST following along. The tell-tale sign is a statement balance that no longer matches your real bank balance on the same date. Duplicated statement lines can be deleted from the account transactions screen, and a deleted line can be restored if you remove the wrong one.

Habits that keep feeds honest

• Reconcile little and often, so a broken feed is caught within days rather than discovered at BAS time.
• Compare the statement balance in Xero to your actual bank balance at least monthly.
• Never delete statement lines just to make the screen tidy; work out why they are there first.
• Treat connection-based feeds as the fragile ones and check them more frequently.

Why has my bank feed stopped working?

Usually because of a change at the bank's end, an expired connection, or a feed that needs re-authorising. Xero normally shows a warning on the dashboard or against the bank account itself.

Will Xero backfill missing transactions once the feed is fixed?

Generally no. Export the missing period from internet banking, import it into Xero manually, then reconcile those lines as usual.

How can I tell if I have duplicate statement lines?

Compare the statement balance in Xero with your real bank balance on the same date. If they disagree for no obvious reason, duplicates or gaps in the feed are the most likely cause.