How do I enter bank transaction fees, interest income on bank balance and withholding tax on interes

Philip Hirschberg

How do I enter bank transaction fees, interest income on bank balance and withholding tax on interest income in Reckon Accounts Hosted Premium?

Sally McIntosh, Accredited Consultant

Hi Philip,

To enter transaction fees I would write a cheque from the bank account so you can pick up the relevant tax code. (banking drop down menu)

To enter interest income I would create a journal entry so you can pick up the relevant tax code. (company drop down menu)

To enter the withholding tax I would also create a journal entry.

I hope this helps.

Kind regards,

Sally McIntosh ([email protected])

Kevin Silberberg

I agree broadly with Sally's advice.  To be more specific in relation to the journal entries, to record interest received, Debit Bank for the amount received at the bank, Credit an Interest Income account for the total interest paid including the Tax withheld.and Debit the Tax Liability account in the amount of the Tax withheld.  For bank transaction fees I also use a journal: Credit Bank in the amount of the fee and Debit a Bank Fee expense account.

Philip Hirschberg

Thank you. Makes sense

Philip Hirschberg

I'm stuck on the tax withheld. As far as I understand, this is because I haven't given the bank our TFN, which I will sort out (one for another day!). Do I still Debit the Tax Payable liability account and Credit the Bank account?

Mirko

Hey Phil, having worked for a bank prior, I know if it is in the same financial year they should be able to re-credit the amount back to you. Don't know if that would affect how you input that into your books (not an accountant/bookkeeper/tax professional). ^Mirko

LisaD

Hi Mirko/Kevin/Sally

Does using the 'write cheque' function as advised by Kevin and Sally require the set up of the bank as a creditor to enable processing of monthly bank fee?

Sally McIntosh, Accredited Consultant

Hi Lisa,
No not necessarily. You can set them up as a Supplier or even an Other Name type if you wish. But they do need to be in one of the names list so you can select their name in the Payee Field of the Write Cheque screen.
Kind regards,
Sally McIntosh ([email protected])

Peta

Hello, If I do a journal entry for interest received from the bank, I have placed the appropriate tax code only under the general ledger code/item "Interest Received" side not the "Bank" and now it shows up on my tax exception report. Is this correct? Or do I need to place the tax code on codes/items?

Acctd4

Yes, that’s fine - The bank account line shouldn’t be coded, only the income/expense line.

Personally, I prefer to use a Sales Receipt for interest received & a Write Chq for interest paid - Keeps this uniform & easy to identify 😊