Accounting treatment for third party

Good morning all

We hire a third party for payment to suppliers, they made directly payment from their account to our suppliers our limit is 20 lakh with third party.
then we have make their payment with in 90 days from our bank, they charged interest from us

How we do accounting of these transactions
is these transactions attract TDS ??
Replies (1)

 Here's a breakdown of how to account for these transactions: 1. *Payment to suppliers*: When the third-party service makes payments to your suppliers, you need to record a liability (accrued expense) for the amount owed to the suppliers. Debit: Suppliers' payable (liability) | Credit: Cash (or bank) 1. *Payment to third-party service*: When you make payments to the third-party service, you need to debit the liability (suppliers' payable) and credit the cash (or bank) account. Debit: Suppliers' payable (liability) | Credit: Cash (or bank) 1. *Interest charged by third-party service*: When the third-party service charges interest, you need to record an expense (finance cost). Debit: Finance cost (expense) | Credit: Cash (or bank) Regarding TDS (Tax Deducted at Source), you may need to deduct TDS on the interest paid to the third-party service, depending on the tax laws in your country. Consult a tax professional or accountant to ensure compliance. Additionally, consider the following: - Ensure you have a clear agreement with the third-party service outlining the terms and conditions, including interest rates and payment terms. - Keep accurate records of all transactions, including payments made to suppliers and the third-party service, as well as interest charged. - Review your accounting treatment to ensure it aligns with the relevant accounting standards and tax laws. .

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