bank charges on international transactions

Question asked by Nel Hargrave 11 years ago

I have a customer who has paid his invoice We agreed that we would pick up any international currency transaction charges So he has sent the balance of payment, and the bank have charged £165 in transaction charges.

I cannot allocate this £165 against his invoice, as it shows as a debit on my account. This means he appears to be an aged debtor, which he is not, and I don't want him shown as such on my accounts (we have worked hard to get all payments in on time)

I'm sure its something really easy I am missing - can anyone help please!

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4 Replies

Hi Nel,

Has the invoice for the customer already been paid in full, and you are trying to reconcile this with the transaction? If so I would recommend removing the £165 from the paid invoice. Then you can allocate the payment from the statement to the outstanding amount on the invoice.

Best answer
11 years ago

I have exactly the same scenario for an international client who I do work for.

My bank (the receiving bank) charges me £7 for the transaction. I raise a £7 credit note and post the bank charge to a "Overseas bank charges' account code, then offset it against the invoice. I hope this is okay, because I've been doing it this way for ages :)

7 years ago

Hi Nel

Just so as I understand, you've invoiced for example £1165 and only £1000 has been received onto account leaving an outstanding balance of £165?

If so, were the £165 bank charges imposed by the sending or receiving bank?

11 years ago

The 165 was not shown as a separate item on the invoice, as I didnt know what the amount would be when I raised the invoice.

The invoice has been paid in full

If I remove it from the invoice then the invoice will show a £165 underpayment and my client as a debtor. Also, this will make the invoice incorrect and not balance with the one issued to Customs and my client.

Nel

11 years ago

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