I invoice a client £100, the client paid £100, but as it was a bank transfer, my bank deducted £5 as a bank service charge. So now it appears the client only paid £95 and has £5 past due against the invoice. How do a enter that £5 was a bank service charge and the client does not have any amount past due?
Does the bank take the £5 before the balance is deposited into your account, or do they take it as a fee the following month (for example)?
The bank takes the £5 before the balance is deposited into your account, so the payment from the client is short
That’s a bit steep! Is that a flat £5 fee for every FPI (faster payment IN), irrespectve of amount? Which bank are you with, out of interest? I pay £5 each month to use an electronic banking tariff as an account fee (as QFMathew refers to). This can be classed as a business/allowable expense and so I tag them to nominal 7901 (bank charges), which appears on the p&l account.
I agree that it sounds OTT, is that being paid from a UK bank or overseas?
In your accounts you need to treat it as if you have received the full £100 to clear the invoice and then paid £5 in bank charges. The bank would need to be set up as a supplier for that. I am not sure how you would reconcile that against tagging the bank account entries.
Easiest way is probably to treat it like a merchant account with an extra “holding” bank account - full payment (£100) from the client into the holding account, charges payment (£5) out, then the £95 in to the current account is a transfer from the holding account to return it to zero.
Could you mark the invoice as paid in full, then raise a purchase of £5 coded to bank charge.
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