Account 513 records cash operations related to credit institutions other than traditional banks associated with account 512. In the General Chart of Accounts, it is linked to class 5 (financial accounts) and is titled “Credit Institutions.” Its distinction from account 512 is based on the nature of the financial institution, not the type of operation.
Account 513 and Account 512: A Technical Boundary Often Poorly Defined
The confusion between account 512 and account 513 arises from a common reflex: attaching everything to the “Bank” account without verifying the legal nature of the institution. Account 512 pertains strictly to banks. Account 513 covers non-banking credit institutions: financial companies, municipal credit funds, leasing organizations when they manage a current account for the business.
The distinction has direct consequences on bank reconciliation. A statement issued by a specialized credit institution must be reconciled with account 513, not 512. Mixing the two distorts the matching and complicates the detection of discrepancies at the end of the fiscal year.
We recommend creating dedicated sub-accounts (513100, 513200, etc.) as soon as a company works with multiple non-banking credit institutions. This facilitates analytical tracking and makes cash controls clearer, especially when justifying balances at the end of the period. You will find additional explanations about account 513 on BusiBoost if you wish to delve deeper into the mechanics of accounting entries.
Debit-Credit Functioning of Account 513 in Current Entries
Account 513 is an asset account. Its normal balance is debit. A credit balance indicates either an authorized overdraft with the credit institution or an accounting error that needs to be corrected before closing.
Debit movements correspond to fund inflows: customer receipts, incoming transfers, deposits for collection. Credit movements correspond to outflows: supplier payments, credit installment withdrawals, financial fees charged by the institution.
A technical point not to be overlooked: interest and fees charged by the credit institution are recorded as a debit in account 661 (interest expenses) or account 627 (bank services), never directly against another cash account. The counterpart remains account 513 on the credit side.
Typical Entries to Master
- Customer receipt via a credit institution: debit 513, credit 411 (customers). The matching is done on account 411, not on 513.
- Payment of a lease installment with interest: debit 612 (lease payments) and debit 661 (interest), credit 513 for the total amount withdrawn.
- Internal transfer from account 512 to account 513: debit 513, credit 512. This movement passes through account 580 (internal transfers) if the company uses separate cash journals.
The use of account 580 for transfers between cash accounts avoids duplicate entries. We observe that this step is often omitted in small structures, leading to discrepancies during reconciliation.
Control of Account 513 at Year-End Closing
No offsetting between debit and credit balances is allowed on the balance sheet for accounts in class 5. The General Chart of Accounts explicitly prohibits this. If the company has a debit balance on sub-account 513100 and a credit balance on 513200, the two amounts appear separately: one on the asset side (cash), the other on the liability side (current bank loans).
The reconciliation of account 513 follows the same logic as that of account 512. Each line of the statement issued by the credit institution must find its match in the general ledger. Unexplained discrepancies at the closing date are subject to adjustment entries.
Points of Caution Regarding Provisions and Depreciations
Cash accounts generally do not have provisions for depreciation, except in specific situations. A risk of non-recovery on a struggling credit institution justifies a provision. This case remains rare, but it necessitates monitoring the solvency of partner institutions, especially when it involves small specialized organizations.
The documentation of the reconciliation must be kept with the closing file. It serves as evidence during a tax audit or review, just like the reconciliation of account 512.
Electronic Invoicing and Increased Traceability of Flows on Account 513
The gradual implementation of mandatory electronic invoicing in B2B relationships enhances the traceability of receipts and payments. This development reduces undocumented movements on cash accounts, including account 513.
For companies that route part of their flows through non-banking credit institutions, this constraint implies a stricter alignment between issued invoices, received payments, and accounting entries. Automated reconciliation becomes more reliable but assumes that the accounting software settings clearly distinguish account 513 from account 512.
In practice, we recommend verifying that each cash journal is properly associated with the correct class 5 account. An upstream configuration error propagates anomalies throughout the fiscal year, with a disproportionate correction cost if detected only at closing.
Account 513 remains a precise classification tool in the General Chart of Accounts, often underutilized. Its proper use improves cash visibility and simplifies revision work. Clearly distinguishing each credit institution with a dedicated sub-account remains the best guarantee of reliable tracking throughout the accounting period.