Bank charges
In one sentenceFees and charges the bank deducts directly from the business's account for its services, such as account fees, transfers and checkbooks. They appear on the statement before the books.
Simply put
The accountant usually learns of them from the statement, because the bank deducts them without a prior document. So they appear as a difference in the reconciliation, and you record them in the books as a bank expense.
Interest or finance costs on loans and overdrafts are not service charges; they are shown separately as finance costs. VAT on the fees is treated as input VAT if a tax invoice is available.
Worked example
A store's monthly statement shows an account fee of 50 SAR and four transfers at 10 SAR each, and the fees carry 15% VAT.
Transfer fees = 4 × 1040
Total fees = 50 + 4090
VAT on the fees = 90 × 15%13.50
Dr Bank charges expense90
Dr Input VAT13.50
Cr Bank = 90 + 13.50103.50 SAR
Don't confuse it with
POS feesPOS fees are deducted from settlements and follow sales, while bank charges are fees for account services.