Do you own a small business and looking to record the bank fees along with your bank transactions in QuickBooks? Well, you are at the right place. We completely understand that for reconciling bank transactions for the small business you might have to record bank fees, finance charges, late fees etc. with the help of your accounting software.
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And since you are already using QuickBooks as your accounting software, the process is already easier. QuickBooks accounting software will let you record your bank fees manually as well as when your bank account is connected to the QuickBooks. So, once you have recorded your bank fees and other transactions, you will be easily able to reconcile your small business’ bank account from the bank statements.
We will be discussing both the above mentioned process in this article, hope you find this helpful and as per your expectation.
Record Bank Fees in QuickBooks without Connecting Your Bank Account
You can find below the step-wise step process of recording bank fees manually or in other words when your bank account is not connected to the QuickBooks accounting software. Each step has multiple sub steps; it is recommended that you follow the steps in the same order to complete the task without much hassle.
Step 1. At the initial step you need to first create an expense account in QuickBooks where you can allocate your bank feeds, for this you can follow below sub steps:
- Open your QuickBooks Software and click on Bookkeeping. Once you have done that click on Chart of Accounts.
- After the above step, you need to select the New from the right hand side panel.
- Once you have created a new expense account, save it as ‘Bank fees‘.
Step 2. After you have created your expense account and named it as ‘Bank fees‘, you can go ahead and create a product or service for the same by following below Sub steps:
- First, click on the Gear icon or settings from the top right hand corner of your QuickBooks software screen.
- Now you need to go below the ‘Lists‘ column and choose ‘Product and services‘.
- After the above steps, click on New from the right hand side panel and click on service and enter the description or name as ‘Bank fees‘.
- In this step, go under the Income account and choose the expense account that you created in Step 1, and click on save.
Step 3. In this penultimate step of recording the bank fees manually in QuickBooks you need to create an adjustment note by following the below steps:
- First of all, click on the New (plus icon) and choose the Adjustment note.
- Now you need to select the customer and select the Bank Fees services created by you in the earlier step.
- Now you need to enter the Bank fees amount and click on save.
Step 4. In the final step you need to match the adjustment note that you created to the outstanding invoice, for this you need to follow the below steps:
- You have to start by clicking on ‘Get Paid and Pay‘ and then choose the Customers.
- After selecting the customer, click on the relevant invoice and select ‘Make Payment‘ option.
- Now tick off the ‘Adjustment note‘ that you created against the invoice and lastly click on save.
Record Bank Fees in QuickBooks When Your Bank Account is Connected
Now, let us see how to record bank fees when your bank account is already connected in QuickBooks and you need to match the transactions in the bank feeds. You can do that as well by following below simple steps:
Step 1. First of all, you need to create an expense account following the similar steps as mentioned in step 1 of “Process of recording bank fee manually” in this article only.
Step 2. Now in this step you need to resolve the difference while matching the transactions from the bank statement, which you can easily do by following below simple steps:
- Start the process by clicking on Bookkeeping and then go to Transactions.
- After clicking on Transaction, select Banking and go to ‘Bank and Credit Cards‘ Page.
- Ensure to select the bank account where in you want to match the transactions and search for the required Transaction by going on the ‘Review tab‘.
- Now click on ‘Find Match‘, this will open the Match Transaction window, where you will have to select the appropriate or correct invoice by ticking the box against it.
- Now click on ‘Resolve Difference‘ and open the ‘Add resolving transactions‘ field.
- After the above step, click on ‘Add New transaction‘ and go to category field through drop-down list and choose the Bank Fees expense account that you created in the Step 1.
- At last, you need to enter the bank fee amount and click on save and close.
Both of the above processes will make your transaction to match off with the invoice and your bank fee will be recorded and accounted for.
As we are already through with the process steps, let us move towards some FAQs or frequently asked questions that Users or small business owner asks. This will further help in clarifying the doubts and questions on this and related matter.
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Can You Let me Know the Accounting Entry for Recording Bank Fees in the Books in Accounting Software?
You can make the correct entry for recording bank fee with the help of your accountant who will debit the bank fees charge account and credit the bank or cash account. In the journal entry bank fees is an expense account which is always debited when increased as per the accounting rules and policies?
What is Step wise Step Process of Recording Bank Fees Refund in QuickBooks?
You can record the bank fee refund by clicking on the New button (plus icon) and going to the bank deposit column under ‘other’ heading. Now in the account box, go ahead and select the expense account that you used while completing the purchases. Now go to the Add funds section and select the account from where the refund is coming. After this, you just need to enter the amount and click on save and close.
Can You Let me know how can I Record the Wire Transfer Fee as an Expense in QuickBooks Online?
First, start with clicking on New and select expense under the Vendors, now you need to specify the vendor or place of purchase in the Payee field. Go to the dropdown list and specify the bank account through which the wire was transferred in the payment account field. Now enter the date of payment and choose the payment method from the dropdown list. After that, you need to enter the wire transfer reference number, specify the expense account, track charges, enter accounts payable, enter the amount and click on save and close.
How can I Record a Wire Payment Fee that got Deducted While Receiving the Payment for an Invoice?
You need to open the existing invoice and click on Receive payment from the upper right panel. Now on the receive invoice payment page choose undeposited funds under the deposit to the field. After this you just have to select the correct invoice, review the amount and click on save and close.