# How to Record Bank Fees From a Client Statement

- Author: AutoBankConvert (https://www.autobankconvert.com)
- Published: 2026-06-09
- Updated: 2026-06-09
- Category: Transaction coding
- Canonical: https://www.autobankconvert.com/blog/how-to-record-bank-fees

> How to record bank fees from a client statement: monthly service charges, wire and overdraft fees, and the refunds that should reverse them in the books.
To record bank fees, post each fee line on the statement as a debit to a bank charges expense account and a credit to the checking account, dated the day the bank took it. When the bank refunds a fee, credit the same expense account so the month shows only what the client actually paid.

## Which bank fees go to a bank charges expense account?

A bank charges account holds the money a bank keeps for running the account itself. Monthly maintenance fees, wire fees, overdraft and returned-item fees, stop payment fees, paper statement fees and foreign transaction fees all qualify. One expense account is enough for most small clients, because these amounts are small and nobody budgets them line by line.

Some practices split the account in two. An overdraft or non-sufficient funds charge says something about how the client manages cash, while a $15 monthly service charge says nothing at all. Putting penalty fees in their own sub-account lets you show a client, in one number, what running the balance close to zero cost them this year. Ask the CPA which layout they want before you add accounts. The guide to [working smoothly with the client's CPA](/blog/bookkeeper-and-cpa-collaboration) covers how to agree on a chart of accounts once rather than fixing it every April.

## Coding bank fee lines from a client statement

Each fee line produces a simple two-sided entry: the expense goes up and the bank balance goes down by the same amount. Use the posting date printed on the statement, not the date the client noticed the charge, so the books keep matching the running balance.

Fee lines are easy to miss. Banks often print them with short codes such as "SVC CHG," "OD FEE" or "INTL TXN FEE," and some put the monthly charge in a summary box rather than among the transactions. Read the whole statement, including the last page.

### Example fee lines from one statement

The values below are an example for a fictional client.

| Date | Statement text | Amount | Account |
| --- | --- | --- | --- |
| 2026-05-03 | OUTGOING WIRE FEE | 30.00 | Bank charges |
| 2026-05-11 | OD FEE ITEM 4471 | 35.00 | Bank charges: penalties |
| 2026-05-12 | OD FEE REFUND | -35.00 | Bank charges: penalties |
| 2026-05-19 | INTL TXN FEE | 4.12 | Bank charges |
| 2026-05-31 | MONTHLY SVC CHG | 15.00 | Bank charges |

The wire fee sits on its own line next to the wire. The wire itself is a different transaction and gets coded by what it paid for. A fee charged on a foreign purchase can be grouped with the purchase if the client prefers, but keeping it in bank charges makes the fee visible.

Once a client's fee lines follow a pattern, categorization rules handle them. In [AutoBankConvert](/), a rule written once for "MONTHLY SVC CHG" codes that line every month for that client, and an unfamiliar fee code goes to the review queue with a suggested account.

## Bank fee refunds and waived overdraft charges

A refunded fee is a reduction of the expense, not income. Record the credit line on the statement as a debit to checking and a credit to the same bank charges account that took the original fee. The two lines then cancel, and the month's expense shows zero for that fee.

The refund does not always land in the same month. An overdraft fee charged on April 29 and refunded on May 4 leaves April with the expense and May with a negative amount in bank charges. That is correct for cash-basis books and rarely worth adjusting. A negative balance in the account for a whole year, though, means a refund was coded there with no matching fee, so look for the missing original line.

Do not code fee refunds to "Other income." It inflates both income and expense, and a reviewer reading the profit and loss sees bank charges higher than the client really paid.

## When is a bank fee line not a bank charge?

A bank fee line is not a bank charge when the "fee" belongs to someone other than the bank, or when the bank is collecting it for another service. These lines sit on the same statement and can look identical, so check the description before applying a fee rule.

- **Card processing fees.** A merchant account deducts its fees from the deposit or bills them monthly. Those go to merchant fees, not bank charges.
- **Loan fees and interest.** A late fee on a business loan or a line of credit belongs with the loan's interest and fees.
- **Payroll or software fees** drawn by ACH from the account are vendor bills, coded to the vendor's category.
- **Fees on the owner's personal wires.** If the owner sent a personal wire from the business account, both the wire and its fee are a draw. The post on [recording owner draws from the business account](/blog/recording-owner-draws) shows how to code those.
- **Transfer lines labelled "FEE."** Some banks print a sweep or savings transfer with a fee-like code. Money moved between the client's own accounts is not an expense; see [transfers between bank accounts in bookkeeping](/blog/transfers-between-bank-accounts-in-bookkeeping) for how to match both sides.

A rule that codes any description containing "FEE" to bank charges will catch most of these by mistake. Write rules on the full fee codes instead.

## A month-end bank fee check for each client

A month-end fee check confirms that every charge the bank took is in the books and every refund cancels a real fee. It takes a few minutes per account and catches the summary-box charge that never appeared among the transaction lines.

1. Add up the fee lines on the statement, including any fee total in the account summary.
2. Compare that total with the bank charges activity for the month in the books.
3. Match each refund to an original fee in this month or the month before.
4. Read any penalty fees and note repeat overdrafts for the client conversation.
5. Confirm the statement balances: opening balance plus transactions equals the closing balance. A fee left out of the books shows up here as a small gap.

Repeated overdraft fees are worth mentioning to the client even when they are small. A short note listing the dates usually costs less than another quarter of penalties.