In short: choose a workflow, not a tool
For most small businesses in Latvia and Estonia, bank connection, i.e. automatic transfer of continuous account information to the accounting program, is suitable for daily accounting, as it keeps the balance and transactions up to date without manual work. CSV import, a one-time account statement file that you upload to the program manually, is still a completely reasonable choice if there are few transactions, there are only one or two banks and you want to keep control to a minimum. Bank connection provides PSD2 directive Under Article 67 to a read-only account. It does not replace an invoice, check, or bank statement as proof of transaction. Latvia Accounting law allows a certified bank statement to be considered as a supporting document only if it has been approved by a responsible person in accordance with the company's established procedure. The right choice in August 2026 is not "automatic or manual". It is a workflow that keeps money movements clear, preserves evidence and puts access to account information under your control.
The difference between the two approaches isn't just about convenience. It's also about accountability: who can see your account information, for how long, and on what basis. This needs to be answered before you click the bank connection confirmation button.
What does bank connection actually do and what does CSV import do?
Bank connection and account information service (AIS)
A bank connection usually means an Account Information Service (AIS). This is the right of a third party to read your account transactions and balance directly from the bank, as per the PSD2 directive. According to Article 67. This is a read right, not an action right: the service provider can see what has been deposited into and what has been withdrawn from the account, but cannot move money independently. The initiation of payments is regulated by a separate article in the directive on the Payment Initiation Service (PIS). These are two different permissions and two different services, even if both go by the name of „bank connection“. If your accounting software only reads and matches transactions, it is an AIS; if it also initiates payments, it is a service with a separate permission.
CSV import as a copy of the current state
A CSV file (Comma-Separated Values, a text-format table that the bank generates from an account statement) has a completely different logic. It is a copy of the current state. You download transactions from one period, import them into the program, and the file is no longer updated by itself. If a new payment order comes tomorrow, you have to download the new file again. A connection, on the other hand, pulls data continuously, often every day or several times a day.
What are the five decision criteria for a small business?
The decision comes down to five questions, not one.
- How much fresh balance do you need? If your customers pay in advance and you need to see the receipt the same day, a bank connection is suitable. If you check your money once a week, you won't lose anything with a CSV import.
- How many transactions per month? You can import 15 transactions per month from a CSV file in five minutes. 250 transactions per month means a constant risk of errors and hours of lost time with manual imports. This is where the connection makes sense.
- How many banks and currencies? One Latvian bank in one currency is easy for CSV. Three banks in three countries in different currencies makes manual import laborious and increases the risk of duplication.
- How big is the risk of error? Manually importing carries the risk of uploading the same file twice or missing a period. The connection reduces this risk, but adds the risk of a matching rule error, which is discussed below.
- What is the backup process? Even if you use a connection, CSV import must be available as a fallback option if the bank discontinues the service or changes the API.
| Criterion | Bank connection | CSV import |
|---|---|---|
| Data freshness | Almost real-time, updates automatically | Current status file, update manually |
| Suitable transaction volume | It is worth considering if there are many transactions and they are constantly coming in. | Suitable if transactions are few and infrequent |
| Multi-bank/currency support | It's good if the interface supports all accounts. | Works, but each bank is a separate file |
| Handicraft | Minimal, requires maintenance of matching rules | Regular downloading and uploading |
| Dependency on a third party | Depends on the service provider's contract and permission | Depends only on the bank, not the intermediary |
| Backup solution in case of failure | Need CSV in your pocket | It is already a backup solution in itself |
Is a bank entry the same as an expense document?
This is where both the association and the CSV cause the most confusion. The bank transaction shows that money moved. It does not show what for, at what VAT rate, or under what contract.
Latvian requirements for supporting documents
Latvia Accounting law According to the law, an external document, invoice, check or contract, must be preferred as a supporting document over an internal document, and the document must be able to substantiate the economic content of the transaction; a bank payment line usually cannot do this alone. An unconfirmed account statement may exceptionally be considered as a supporting document, but only if the responsible person has separately confirmed the transaction and the correctness of the data in accordance with the procedure established by the company manager.
Estonian requirements for a supporting document
The Estonian side is even clearer: Estonian Accounting Act According to the Act, every accounting entry must be based on a source document evidencing the transaction or a consolidated document prepared on the basis of source documents. A bank statement is not a source document, an invoice or a check is. From 1 July 2025, the source document must be generally machine-readable, other permanently reproducible documents in written form are permitted only in exceptional cases specifically specified in the law. Both Latvian and Estonian law retain the liability of the company manager even if the accounting is performed by an accountant, bookkeeper or program for him. Latvian law says it directly.
In practice, this means one rule: each receipt and payment must be linked to its own invoice, check or contract, number for number, amount for amount, regardless of whether the bank line reached the accounting system via a connection or a CSV file. Retention periods vary by country: In Latvia, accounting records and administrative documents are required keep for 10 years, other supporting documents for at least five years; in Estonia, original documents, registers, diaries and contracts must be to keep for seven years after the end of the relevant financial year.
How to merge a bank without losing control?
Before you grant a third party access to your account, go through a checklist that puts the decision-making power in your hands.
- Limit the scope of consent. PSD2 Article 67 obliges the service provider to ask for explicit consent and is limited to the specified accounts and related transactions. Only grant access to the accounts you actually need for accounting, not to all of the company's banking products.
- Check the status of the service provider. Before using the service, check if the provider is listed Register of EBAs. It is updated at least once a day based on data from Member States, but inclusion in the register does not in itself confer legal rights or definitively prove status; check the register of your national supervisory authority in parallel.
- There does not need to be a contract between the bank and the service provider. PSD2 does not require that the bank servicing your account and the account information service provider be have entered into an agreement with each other. Permission comes from your consent, not from the banks' agreement.
- Distinguish user rights. Give the accountant the right to review and reconcile transactions, not approve payments. The two different roles must remain separate in the program.
- Keep the CSV export handy. Even with a continuous connection, you retain the ability to manually download your account statement as a CSV file. This is your backup solution if the interface is interrupted.
- Check the activity log regularly. Check who has accessed your account information and when, and revoke access immediately if you no longer use the service provider.
European Commission according to the overview of payment directives The goal of the entire regulation is to create a secure and unified payments market where the consumer and entrepreneur, not the intermediary, decide to whom their data is disclosed.
How to implement a hybrid model without duplicate records?
In practice, most small businesses work best with a hybrid model: a bank connection for daily monitoring, a CSV for backup and control. Here's how to build it in four steps.
- Adjust the opening balance. Before starting the connection, compare the accounting balance with the actual bank balance to the exact date. Any future differences will then be immediately visible.
- Create automatic matching rules. Set up rules that automatically match recurring payments (rent, leasing, invoices from the same customer) to the corresponding invoice, but leave the rule set up so that it matches the amount and reference number, not just the amount.
- Review unmatched transactions weekly. Every week, review the transactions that the rule failed to automatically match. These are the places where mismatches occur most frequently.
- Compare with the bank statement at the end of the month. At the end of the month, download a CSV-formatted account statement and check it against your accounting balance. This will catch any gaps in the connection that the automation itself won't notice.
This order is important: if you start with automatic rules before matching the opening balance, every future transaction will carry the old error.
Why are Latvia's deadlines for correct matching becoming more urgent?
Latvian accounting rules are moving towards structured e-invoicing, and this will affect how quickly the bank line and invoice need to match. From From 1 January 2025 Invoices issued by a Latvian company to a state or local government agency (G2G, B2G, G2B transactions) must be prepared as a structured e-invoice, in a format that complies with the LVS EN 16931-1:2017 standard and is machine-readable without manual reprocessing. From From 1 January 2026 an additional obligation to forward these e-invoices to the Latvian Tax Authority, Valsts ieņēmumu dienesti or VID. From From 1 January 2028 The obligation to submit e-invoices and VID to the Estonian Tax and Customs Administration also extends to business-to-business (B2B) transactions. The deadline, which was originally set for early 2026, was postponed by a later amendment to the law.
This does not mean that a bank connection will become mandatory. The regulation concerns the invoice format and its transmission to the tax authority, not the accountant's workflow with account data. But if invoices move in a structured form and automatically reach the VID, it is worth having the same level of order in the bank's data flow: the more accurately the invoice and bank payment are linked today, the less work will be required in 2028, when the control of B2B invoices will become more intensive.
FAQ
What does bank connection actually do and what does CSV import do?
Bank connection is an account information service (AIS) that reads account transactions and balances directly from the bank based on the PSD2 directive. CSV import is a snapshot where you download transactions from one period and import them manually. Bank connection updates data continuously, CSV import requires a new file each time.
Is a bank entry the same as an expense document?
No, a bank transaction only shows the movement of money, not its economic content. Latvian and Estonian laws require an invoice, check or contract as a supporting document. A bank statement is not a source document, but can be used in exceptional cases only with the approval of the manager.
How to merge a bank without losing control?
Limit the scope of consent to only the necessary accounts, check the service provider's status in the EBA register, differentiate user rights, and keep a CSV export as a backup solution. Regularly check the activity log and revoke access immediately when you no longer use the service.