Bank Charges
Also called: Bank Commission, Bank Fees
Cheque book, transfer, SMS, card and account service fees the bank deducts, on the Profit and Loss statement.
In detail
Bank Charges records what the bank takes for its services: transfer and connectIPS fees, cheque book charges, SMS alerts, card annual fees and loan processing fees. They are usually found on the bank statement rather than on a bill, so they are posted by Journal Entry when the statement is reconciled, or in the Deductions table of the Payment Entry they relate to. The chart has two ledgers with this name, one under Other Operating Expenses and one under Finance Costs; use the operating one for routine transaction fees and the Finance Costs one for charges tied to borrowing, such as loan processing or guarantee commission, so the finance cost line stays meaningful. They carry no VAT and no TDS.
Formula
Bank Charges for the period = Fees shown on the bank statements for the months, split between operating and finance
Accounting entry
| Account | Debit | Credit |
|---|---|---|
| Bank Charges | Rs 250 | |
| Bank Account | Rs 250 |
How to record it in BRAccount
- 01Open Banking > Bank Reconciliation Tool and find the fee rows on the statement with no matching voucher.
- 02Create a Journal Entry from the tool, or go to Invoicing > Journal Entry > New.
- 03Debit Bank Charges under Other Operating Expenses for transaction fees, or under Finance Costs for loan fees.
- 04Credit the bank account and submit. The entry below posts.
- 05Alternatively, add the fee in the Deductions table of the related Payment Entry.
- 06Confirm the bank balance matches the statement after posting.
When to use it
Post by Journal Entry or Payment Entry deduction when the statement shows a charge. The chart has two accounts with this name, one under Finance Costs; use one consistently.
Example from the demo books
Dr Bank Charges Rs 250, Cr Bank Account Rs 250 for the connectIPS transfer fee on Jivan Dahal's refund.