How to book Bank fees?

I am having bank fees due with an international Bank Transfer against a Purchase invoice. So the money needs to go

from: our bank account
to: expense Account (Financial Expenses)

What I want to achieve is to have also a record to the bank who actually charges the fee from me (exists as a Supplier in ERPNext).

  1. is that necessary (from an accounting point of view)? I guess not.
  2. If one still wants that, do you mandatory need to go through “Purchase Invoice” (which creates the liability to the bank which then is balance out by a payment entry)? I don’t see any way to connect a supplier to a line in the journal entry, if only a bank account and an expense account is involved.

just thinking whether a Journal Entry with 4 lines would achieve this

Account   Party            Debit   Credit    

payable   supplier/bank              10.-    
expense   --                10.-
bank acc  --                         10.-
payable   supplier/bank     10.-

What do mean exactly by “a record to the bank”? There are many valid ways to do the accounting, I think, and it’s really just a question of how you want the information organized in your books.

If you want it attached to the purchase invoice, you could treat it as a charge/fee. If you want it attached to the payment, you could treat it as a deduction. If you want a stand alone document, the 4-line journal entry you’ve got seems ideal.

hm, strange wording of mine.

What I mean is that I would like to be able to

  1. see how many bank fees where paid in total, but also to
  2. differentiate to whom exactly (which bank (you may have more then one), which credit card institution, which payment provider (PayPal, i.e.)) you have paid how much

you mean the “Taxes and Charges” Section, right?

Problem here may be, that the amount of bank fee is only known after the payment was processed. And normally we’d submit the Purchase Invoice earlier then that. So, I’d not have access to that part without cancelling/amending the PINV (which I would not want to do I guess for this purpose)

Problem here may be, that the amount of bank fee is only known after the payment was processed.

Got it. In that case, I’d say you have two options:

  1. Attach it to the payment entry as a deduction (I can’t remember exactly what it’s called, but I’ll check when I next have access to my development server). This is a little tidier, in my opinion, if the fee is lumped into the transfer amount by the bank.
  2. Do the journal entry exactly like you’ve written above. This probably makes more sense if the bank fee is posted separately to your bank account. (For ease of reconciliation, I like my accounts ledger to match my bank transactions as directly as possible.)

Would either of these serve your needs? The payment entry approach would bypass the receivables step, but you could still identify which fees were paid to which banks by the payment method.

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yes, it is a separate entry in the bank’s Statement

I agree

thx for your advice