Account analysis is a detailed overview provided by a bank to business customers, offering information about the services the bank performed for the business over the course of an accounting period. It could be likened to the personal statements that banks send their private customers to familiarize them with all account activity recorded by the bank. Typically, an account analysis is sent out once a month, commonly on a set date so that banks and customers can use a consistent accounting period for tracking financial activity.
In an account analysis, the bank will provide information about all of the transactions involved with a business account or accounts, including withdrawals, transfers, checks paid, and deposits. If there are outstanding checks, they will be noted, as will account balances, any charges incurred over the course of the month, and other information that may be relevant or important to the customer. The account analysis can also provide an overview with information about averaged balances and financial activities during the accounting period.
This statement is reviewed carefully by an accountant or someone in charge of financial record keeping. The information is verified to confirm that it matches internal records and any disparities are noted so they can be questioned and addressed. Additionally, charges and fees are entered as accounting entries so the business can keep its records up to date. If charges are incurred because of issues like bad checks written by creditors, the company can use the information on the account analysis to generate a bill to the customer to compensate for the charges.
The descriptive statement is filed after it has been reviewed so it can be referenced again if necessary. If any problems or discrepancies are observed, they are discussed with the bank. Sometimes banks make mistakes such as deducting a check twice, or an accountant fails to log an activity and is confused when it shows up on the statement. Banks usually have personnel who focus on serving their commercial customers so these matters can be quickly cleared up.
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 account for business activity and seek out ways to run a business more efficiently and effectively. A cost accountant usually does account analysis and the process can become very complex.
