What Bank Statements Show & Why They Matter

Bank statements are important financial records for both personal and business banking accounts. Reviewing your bank statements regularly can help you track spending, monitor account activity, and identify potential issues or fraud.

What Is A Bank Statement?

A bank statement, sometimes called an account statement, is a document provided by your bank that shows account activity over a specific period of time (usually one month).

Bank statements include records of deposits, withdrawals, transfers, payments, fees, and other account transactions, helping account holders track spending, monitor cash flow, and review account activity.

Electronic VS Paper Statements

Many banks offer both electronic statements (e-statements) and paper statements.

E-statements are convenient, reduce paper clutter, and are easier to store digitally. Paper statements may still be preferred by businesses that keep physical financial records or prefer printed documentation for bookkeeping and taxes.

Information Included In A Bank Statement

Most bank statements contain similar account details and transaction information.

Contact Information

Bank statements typically include your name, business name, address, email, and other account contact information. It’s important to review this information regularly to make sure it is accurate.

Average Daily Balance

Some bank statements include your average daily balance for the statement period. This can be especially important for accounts with minimum balance requirements or monthly maintenance fees.

Deposits & Money In

Bank statements usually summarize incoming transactions, including deposits, transfers, refunds, and other credits to the account.

Opening & Closing Balance

The opening balance shows your account balance at the beginning of the statement period, while the closing balance reflects the balance after all transactions during the statement period are processed.

Account Activity

The account activity section lists all transactions made during the statement period, including debits and credits.

Common transaction details include:

• Transaction amount
• Transaction date
• Merchant, business, or individual involved in the transaction

Bank statements typically do not include itemized purchase receipts. Keeping separate business and personal accounts can make bookkeeping and expense tracking easier.

What Are Bank Statements Used For?

Bank statements are useful for tracking finances, identifying fraud, applying for funding, and preparing taxes.

Tracking Income & Expenses

Bank statements help businesses monitor spending, track income, manage budgets, and review cash flow over time.

Identifying Fraud

Reviewing bank statements regularly can help businesses identify unauthorized transactions or account discrepancies more quickly.

Many banks also place time limits on reporting fraud or transaction errors, so reviewing statements monthly is important.

Applying For Funding

Lenders often request recent bank statements when businesses apply for loans or financing. These statements help lenders evaluate revenue, cash flow, and overall financial health.

Using Bank Statements For Tax Purposes

Bank statements can help businesses track deductible expenses and organize financial records during tax season, especially when paired with receipts and accounting records.

The Bottom Line On Bank Statements

Bank statements are important financial records that help businesses track account activity, monitor income and expenses, identify fraud, apply for funding, and prepare taxes.

Reviewing your bank statements regularly can help you stay organized, catch potential issues early, and better understand your business finances.

Want to know more about business banking? Start by learning how to open a business bank account. Next, learn how to choose the best bank for your business. Finally, start your search with our top picks for best business bank accounts.