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+1-802-778-9005When you reconcile bank transactions for your small business with QuickBooks, you may occasionally need to record a bank fee. Intuit’s QuickBooks application handles bank fees in the same location as the checks that you record in the register. Users can easily enter their bank fees using the Banking feature.
To make a profit and pay operating expenses, banks typically charge for the services they provide. When a bank lends you money, it charges interest on the loan. When you open a deposit account, such as a checking or savings account, there are fees for that as well. Even fee-free checking and savings accounts have some fees. It’s important to know all the fees your bank charges, as well as how to reduce or eliminate as many of them as possible. It all starts with an understanding of the fees that banks charge.
When you reconcile bank transactions for your small business with QuickBooks, you may occasionally need to record a bank fee. Intuit’s QuickBooks application handles bank fees in the same location as the checks that you record in the register. Users can easily enter their bank fees using the Banking feature.
QuickBooks offers various methods for entering the bank fees, such as clicking the Product and Services button or hitting the Adjustment Note tab. With these methods, you can successfully record the fees and maintain the information related to your accounting operations. Once you’ve recorded your bank fees, you’ll be able to properly reconcile your company’s bank accounts against your bank’s statements.
Banks charge fees to help make a profit. Bank fees allow financial institutions to reimburse operating expenses. Banks also make money on loans via interest and other fees. The major types of bank fees are charged by automated teller machines (ATMs), as well as overdraft, wire transfer, paper statement, inactivity, and account maintenance fees.
If you received less than the due amount on invoice because of bank fees, and you need to record this from the bank feed, create an expense account for bank fees if you don’t have one already and then resolve the difference when matching the transaction from your bank feed.
The first step is to create an expense account for bank fees if you don’t already have one. Here’s how:
Note: If you’ve connected the Accept Card Payments with the PayPal app, the expense account PayPal Fees is already created for you, and you can skip this step.
Navigate to Transactions and then select Chart of Accounts.
Click New and then select Expenses from the Account Type dropdown.
Choose the Bank charges from the Detail type dropdown.
Type Name as Bank fees and then hit the Save and Close tabs.
Now, the account is created, and you’re good to go.
Once you have an expense account for bank fees, you can resolve the difference between the invoice and the payment when matching transactions from your bank feed. For this, do the following:
Hover over Transactions and select Bank Transactions. Then, click on the Bank account with the transaction.
Locate and choose the relevant transaction on the For Review tab. Later, select the Find Match icon.
Tick mark the checkbox for the appropriate invoice under the Match Transactions window.
Choose Resolve to open Add Resolving Transactions.
Click on the Bank fees expense account you created in the Category dropdown menu.
Enter the amount of the bank fee.
Click on the applicable GST and then press Save.
Your transaction is now matched off against the invoice, and the bank fees are accounted for.
For recording bank fees manually when you have your bank account connected to QuickBooks, adhere to the steps listed below.
Navigate to Bookkeeping and then select the Chart of Accounts.
Press New on the right-hand side, then Create an Expense account and name it Bank Fees.
Hit the Save tab.
Hit the Gear icon at the right-hand corner and then choose Products and Services under the Lists column.
Press New on the right-hand side and then click on the Service icon.
Name it Bank Fees, and then select the Expense Account you just created under the Income Account section.
Click on the Save button.
Click + New and then select Adjustment Note.
Choose the Customer and Bank Fees service you just created.
Enter the Bank Fee amount.
Press the Save button.
Head to Sales and then choose Customers.
Select Relevant Invoice.
Click on the Make Payment option.
Tick mark the Adjustment Note off against the Invoice.
Hit the Save icon.
Under the QuickBooks Home page or the Customers menu, choose Receive Payment.
Enter the customer’s name in the Received From dropdown menu.
Write down the Amount you received.
Make sure the Date is correct, and then select the Payment method.
Choose the Invoice or Invoice you’d like to pay.
Click on the Discounts and Credits to add a discount or credit.
Click the Save & Close tabs.
From the Customers menu, select Receive Payments.
Click on Create a Payment and then fill out all the necessary fields.
Choose the outstanding invoices and charges you’re receiving the payment for. A check starts displaying beside the invoice or charge.
Select Group with other undeposited funds to hold the payment in your undeposited funds account, or click on Deposit to then enter a specific bank account.
Press the Save button.
To edit a payment, choose a payment in the list, then edit the info. Or, hit the Show/hide customer information icon to view a history of the payments for a customer.
You are recommended to match and adjust downloaded transactions, especially if there are fees. The only way is to create a bank deposit and manually add the fee. Below are the steps to be followed:
Navigate to the Banking menu and then select Make Deposits.
Under the Payments to Deposit window, choose the payment you want to deposit. Then, press the OK button.
On the Make Deposits window, click on the account you want to put the deposit into from the Deposit to drop-down menu.
Type the fee on the next line as a negative amount.
Fill out the details as needed, then press Save & Close.
Once done, you can now match it on your bank feeds.
After manually entering the deposit in QuickBooks, you can match it with payment on the Checking account and it won’t cause duplicate entries on your Chart of Accounts.
Find/locate a downloaded transaction using the Match option under the Action column on the Banking page.
Note down the Date, Description, Payee, and Amount spent or received.
Select the downloaded transactions to expand the view.
Analyze the Matching records found in QuickBooks. This is the possible matching transaction you already entered in QuickBooks.
Click on the link beside each match to get more detailed information.
Ensure that this is the correct match. To be specific, review the Deposit to, Payment method, and Bank account fields on forms for the existing transaction in QuickBooks.
If you find the correct match, close the open transaction. Then, hit the Match icon.
You may incur bank charges when receiving payments from your customers. As a result, you’ll encounter issues when it comes to recording the bank charges.
Click + New and choose Journal Entry. Then, type the Journal Date.
Under the empty table, input the following double entries:
Press the Save and Close buttons.
Move to Sales and then choose All Sales. Then, find the invoice that has incurred the bank charges.
Select Receive Payment at the top right of the invoice.
Tickmark to choose the invoice and the Journal Entry under the Receive Payment page.
Make sure the Amount received is correct (total invoice amount – bank charges = Net amount received).
Hit the Save and Close tabs.
Some financial institutions include processing fees while you’re on the bank deposit window. If this is your case, the steps listed below are for you:
Navigate to the +New and then choose Bank Deposit under Other.
Enter all the necessary information.
Scroll down to locate the Add funds to this deposit and type a charge in the line item. Then, select who gave these fees.
Choose Bank Charges in the Account dropdown menu.
Write down the amount as a negative number. Check and review the deposit total along with its fee.
Click Save and Close tabs.
However, if your account doesn’t have a bank charge account, you can create one. For this, follow the steps below:
Hover over Add funds to this deposit on your Bank deposit page.
Select the Account dropdown menu and then click +Add new.
A new window will pop-up on your screen and then choose Expenses under the Account Type and Bank Charges under the Detail Type.
Enter a name you can easily remember, such as “Bank Fees.”
Banking fees are entered as bank charges before a bank account is reconciled. The amount is then considered negative since it is an expense taken out from your bank account. Let’s see how.
Head to the +New button and then choose Bank deposit under Other.
Click on Bank Charges under the Account column.
Type the total amount of your banking fees within the reconciliation period.
Press the Save and Close tabs.
You can enter the bank service fee as a new Service item or type the bank service fee amount into the register so it matches the bank statement. Once done, enter the fee as a negative amount on the Bank Deposits screen upon depositing a payment. Here’s how:
Click + New icon at the top and then choose Receive Payment.
Type all the payment information and tick mark the checkbox next to the invoice you would like the payment to be applied to.
Select Undeposited funds from the Deposit To dropdown menu and press Save and Close to record the transaction.
Press + New and then choose Bank deposit.
You should see the payment you entered in the Select Existing Payments included in this deposit section at the top.
Place a checkmark to select the payment you want to deposit.
Under the Add other funds to this deposit section, enter the amount of the bank service fee charged to you by the credit card company as a negative amount.
Select the Expense account you usually use to track bank fees in the Account section.
Check that the deposit amount is accurate. Then, hit the Save and Close tabs to record the transaction.
Banks provide a tremendous service, and our worldwide economy probably couldn’t function without them. In this article, we can clearly see that these services aren’t free. The best protection you have is to be aware of the fees you are paying and not unquestionably accept them. Accurately Recording the ins and outs of bank accounts, credit, fees, and savings can help you avoid penalties or some major mistakes.
To account for bank charges in QuickBooks, follow these steps:
Banks charge fees to help make a profit. Bank fees allow financial institutions to reimburse operating expenses. Banks also make money on loans via interest and other fees. The major types of bank fees are charged by automated teller machines (ATMs), as well as overdraft, wire transfer, paper statement, inactivity, and account maintenance fees.
Yes, bank charges require a journal entry. These charges are considered an expense, so they are debited in the accounting records. To account for the decrease in your bank balance, the bank account is credited. This entry ensures that the bank charges, often noted on the last day of the bank statement, are accurately reflected in the company’s books.
To manually record bank transactions online in QuickBooks, follow these steps:
Note: This Ensures your transactions are accurately recorded and synced in QuickBooks.
Disclaimer: The information outlined above for “How to Record Bank Charges in QuickBooks Desktop & Online?” is applicable to all supported versions, including QuickBooks Desktop Pro, Premier, Accountant, and Enterprise. It is designed to work with operating systems such as Windows 7, 10, and 11, as well as macOS.
