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Learn how to use your business bank statement.

The Basics of Business Bank Statements

If you have a business bank account, you will receive a bank statement on a regular basis. Don’t just toss your unopened business bank statements in a drawer or—even worse—in the trash. Your business bank statements can be valuable tools for managing your business finances.

What is a bank statement?

A business bank statement is a summary of all transactions in your business bank account. Each transaction is listed individually, so you can see your income and spending.

Each bank statement covers a certain amount of time, typically a month. Your financial institution will send you the statement at the end of each statement period. It might send a paper copy through the mail, or an electronic copy through an email or your online account.

Parts of a bank statement

A bank statement has many parts. Understanding your bank statement parts is essential to get the full benefits of your business bank statement.

Here are common bank statement details:

Bank information

Your financial institution’s contact information will be on the bank statement. It should list the financial institution’s name, address, and customer support phone number. If there is a specific number for reporting discrepancies, your statement might include it.

Business information

The bank statement will list your business’s information. It will likely include your name, business name, address, and phone number.

Account information

Your statement will have basic information about your bank account. It’ll have your account name and account number.

Statement dates

The bank statement will tell you what dates it covers. For example, it might say, “Statement for March 1 to April 1, 2018.”

Account summary

The account summary summarizes your account for the statement period. It includes the account balance at the beginning and end of the period, total withdrawals, and total deposits. The account summary is typically located near the top of the page.

Transaction summary

The transaction summary will take up a majority of the space on the bank statement. It lists every account transaction in chronological order. For each transaction, the statement lists the date, a description, the amount, and account balance after the transaction. Bank statement descriptions might list what kind of transaction was made and where it was made.

Bank messages

Some financial institutions will include messages and news on the bank statement. If your financial institution does this, messages may not appear on every statement.

Example business bank statement

Check out this business bank statement sample:

Business bank statement example graphic

What is a bank statement used for?

A business bank statement can have many purposes within your business. There isn’t a single purpose of a bank statement.

Uncashed checks

You can use a business bank statement to keep track of uncashed checks. You can see if checks you wrote have been cashed or if you still need funds to cover them. You might do this by comparing your bank statement to your check register.

Tax returns

You can use your bank statements as supporting documents for business tax forms. You can reference your statements to be sure you are reporting your taxes correctly. If you are audited, you can use the bank statements as proof that your tax returns are accurate.

Business loans

When you apply for a business loan, you might have to show your bank statements to the lender. The lender will review the statements to help determine if you are a good fit for a loan.

Business budgeting

When you go over your bank statements, some spending habits might jump out. You might realize you are spending a lot of money at certain places. Or, you might discover an overlooked source of steady income. Creating a business budget is easier when you estimate your future transactions based on your past transactions.

Errors  and unauthorized transactions

By reviewing your business bank statements, you can find errors and unauthorized transactions. These might be reporting mistakes, or someone might have stolen your credit card. By regularly looking for discrepancies, you can report them faster and hopefully get your money back.

Bank statement reconciliation

You can use your bank statement to make sure your accounting books are accurate. This is called reconciling bank accounts. You compare the entries between the two and look for inconsistencies.

Accounting software is a great way to keep track of your business’s finances. You can try Patriot’s small business accounting software for free. Start your free trial today.

This article is updated from its original publication date of 2/11/2015.

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