Account analysis is a monthly statement provided by banks to business customers, detailing all transactions related to the account, charges incurred, and other relevant information. It is reviewed by an accountant and can be used to generate invoices or resolve discrepancies with the bank. The term is also used in cost accounting to analyze expenses.
Account analysis is a detailed summary provided by a bank to business customers, providing information about the services the bank performed for the business over the course of an accounting period. It could be compared to the personal account statements that banks send to their private clients to familiarize them with all the account activity recorded by the bank. Typically, an account analysis is submitted once a month, usually on a set date so that banks and clients can use a consistent accounting period to track financial activity.
In an account analysis, the bank will provide information on all transactions related to a business account or accounts, including withdrawals, transfers, cleared checks, and deposits. If there are outstanding checks, they will be noted, along with account balances, charges incurred during the month, and other information that may be relevant or important to the customer. Account analysis can also provide an overview with information on average balances and financial activities during the accounting period.
This statement is carefully reviewed by an accountant or someone in charge of keeping financial records. Information is verified to confirm that it matches internal records and any disparities are noted so they can be challenged and addressed. Additionally, charges and fees are recorded as accounting entries so that the company can keep its records up to date. If charges are incurred due to issues such as bad checks issued by creditors, the company can use the information in the account analysis to generate an invoice to the customer to offset the charges.
The descriptive statement is archived after it has been reviewed, so it can be referred to again if necessary. If problems or discrepancies are noted, they are discussed with the bank. Sometimes banks make mistakes like deducting a check twice, or an accountant doesn’t record an activity and gets confused when it shows up on the statement. Banks generally have staff who are focused on serving their business customers so that these issues can be resolved quickly.
The term “account analysis” is also used in cost accounting to describe reviewing accounts, classifying expenses as variable or fixed, and then analyzing them. This information is used for a variety of purposes as people consider business activity and look for ways to run a business more efficiently and effectively. A cost accountant typically performs account analysis, and the process can become very complex.
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