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).
is that necessary (from an accounting point of view)? I guess not.
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.
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.
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:
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.
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.