Before You Start

This guide assumes you have active Mercury and Xero accounts with necessary user permissions.

Overview

30 min
Setup Time
Intermediate
Difficulty
Monthly
Maintenance

What You’ll Learn

  • How to set up automated Mercury bank feeds in Xero
  • Creating rules for common Mercury transactions (e.g., venture debt)
  • Reconciling Mercury credit card statements
  • Best practices for managing multi-currency treasury accounts

1. Preparation Steps

Before connecting anything, you need these accounts in Xero:

Required Accounts

  • Mercury Bank Account (Bank Account Type)
  • Mercury Credit Card (Credit Card Liability Account Type)
  • Venture Debt (Long-Term Liability Account Type)
  • Interest Expense (Expense Account Type)

Optional (but recommended)

  • Treasury Income (Other Income Account Type)
  • Software Subscriptions (Expense Account Type)
  • Shareholder Funds (Equity Account Type)

2. Choosing Your Sync Method

You have two main options, each with serious pros and cons.

Method A: Direct Bank Feed (via Plaid)

This is the recommended automated connection.

Pros:
  • Automated daily transaction import.
  • Reduced manual data entry.
  • Real-time financial visibility.
Cons:
  • Relies on Plaid’s stability.
  • Occasional feed disconnections.
  • Requires periodic re-authentication.

Method B: Manual CSV Import

This method gives you full control but requires more effort.

Expert Tip: We strongly recommend using the direct bank feed via Plaid for ongoing operations. It significantly reduces manual errors and ensures your books are consistently up-to-date. Manual imports are best for historical data or troubleshooting specific periods.

3. Step-by-Step: Setting Up Bank Feeds

Here is the high-level workflow for a clean setup.

Here is a sample code block to show how a Xero API call might look for a bank transaction.

{
  "date": "2025-01-15",
  "amount": -150.00,
  "payee": "AWS Inc.",
  "description": "Cloud Services",
  "reference": "INV-2025-001"
}

4. Setting Up Mercury Bank Feeds in Xero

  1. 1

    Connect Mercury to Xero via Plaid

    In Xero, navigate to ‘Accounting’ > ‘Bank accounts’, then ‘Add Bank Account’ and search for ‘Mercury’. Follow the prompts to log in via Plaid.

  2. 2

    Categorize Initial Transactions

    After the first import, review and categorize initial transactions to teach Xero your common entries. This primes the system for automated rules.

  3. 3

    Create Bank Rules for Recurring Transactions

    Set up bank rules for common startup expenses like SaaS subscriptions, payroll, and venture debt payments to automate reconciliation.

Common Error: Feed Disconnects

Ensure your Mercury credentials in Plaid are up-to-date. Regular re-authentication may be required to maintain a stable bank feed. Check the bank feed status in Xero periodically.

5. Testing Your Setup

Test Import Checklist

  • Review the last week’s transactions in Xero
  • Verify transaction categorization and rule application
  • Check reconciliation of Mercury credit card payments
  • Confirm venture debt payments are correctly recorded to liability accounts

Need Help?

Get Support

Having trouble with your setup? Our team can help troubleshoot your specific workflow.

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