Every business incurs bank charges. Charges should be compared from one bank to another and the bank charges should be allocated to the profit centre to which the charges relate.
If they cannot be directly allocated to a specific profit centre, then bank charges should be debited to the Administration Section - Profit & Loss Account so that the bank charge costs can be included in the administration charge recovery to be made from the operating departments.
This paper analyses bank charges under the following headings:
- Bank Account
- Compare Charges
- Bank Charge Allocation
