Keeping track of cash and bank balance is equally essential; nothing weighs less here. The financial summary or a window for bank balance is provided via bank statements. And many parties are interested in these statements for professional and official purposes. A bank statement analysis is also utilised for our usage at various points in time, as it accounts for all our financial transactions. It displays the current balance available, deposits made, withdrawals, penalties due, charges and much more. An overview of this statement offers details on an account holder’s financial history.
Now the question is, Why would we need a bank statement analysis? Good banking records help in preparing accurate financial statements. For a proper analysis of these statements, it is imperative to have a clear insight into the related matters. A bank statement is similar to a profit & loss statement.
Another great utility that comes with a bank statement analysis is when we apply for a loan. Any bank will ask for the statement of a particular period, as it acts as a proof for the financial abilities. During the loan purpose but at many official fronts, this analysis is required for documentation purpose. Owing to ease of comprehension, people and organisations prefer to go for this analysis. Understanding this document is no rocket science, and there is no need to hold the expertise of vital accounting concepts. Even a layperson can catch contain the details therein.
A bank statement generally has two major components:
- Summary of the account,
- Transaction details.
At the top, there is an account overview that holds the opening balance, deposits, credits, interest added. This overview finishes with the closing balance at the end.
The detailed part of the transaction shows everything in chronological order; from day one to the present day. The transactions are reported with the date, number, name of the payee or payer. So it becomes easy to comprehend for everyone. Besides, just by looking at bank statement analysis, you can gain insight into what is happening with the funds. If you keep this statement updated, then you might not need to fall into unnecessary calculations. And thanks to the technology, that brings us fantastic software as tools.
