How to Record Bank Guarantee Commission
Records the periodic commission paid to a bank for the issuance and maintenance of a bank guarantee.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Bank Charges - Guarantee Fees | Expense | 800.00 | - |
| Cash at Bank | Asset | - | 800.00 |
💡 Accountant's Note
Banks charge a commission (often quarterly) for providing a guarantee to a third party on behalf of the company. This is recognized as a finance-related operating expense.
Practitioner & Systems Framework
💻 ERP Architecture
Set up a recurring journal entry if the commission is charged at fixed intervals.
⚠️ Audit Flags
Sudden spikes in bank charges without a corresponding increase in trade activity or active guarantees.
📄 Required Documentation
Bank Advice, Guarantee Agreement, and Fee Schedule.
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