How To: Enter Bank Interest
Table Of Contents
Introduction
If your bank account has earned interest, you can record this in Khaos Control by posting a journal between the bank account and a dedicated nominal account for bank interest.
Using a separate nominal account makes it easy to report on interest income independently from other income and expenditure.
Steps
1. Create a Bank Interest Nominal Account
Create a nominal account specifically for bank interest transactions.
For example:
- Code: Choose an appropriate nominal code.
- Description: Bank Interest
For guidance on creating a nominal account, see How To: Create Nominal Accounts.
2. Post the Interest Using a Journal
Create a journal between the bank account and the Bank Interest nominal account.
For guidance on creating journals, see How To: Journal between Nominal Accounts.
The journal should:
- Debit the bank account to increase its balance.
- Credit the Bank Interest nominal account to record the income received.
Additional Information
Using a dedicated Bank Interest nominal allows you to:
- Track interest earnings separately from sales and other income.
- Include interest income in financial reporting.
- Reconcile interest payments shown on bank statements.
Notes
- You may also wish to create a separate Bank Charges nominal account to record charges and fees applied by your bank.
- If VAT needs to be included, create and use the appropriate tax nominal account. When posting the journal, Khaos Control will ask whether the VAT is included or excluded in the amount entered.
- The system will then create the relevant VAT entry so it can be included in your VAT Return.