Account statements are records maintained by businesses to give an overview of their financial performance. These records are documents used by investors, agencies, and firms to validate financial data, audit, and ensure accuracy for taxation and investing purposes. There are various types of account statements which are important for every company and we will be providing an overview of what to look for when processing data from them.
Account statements provide a summary of financial activities that occur in specific periods of time. An account statement displays transactions on its pages on a monthly, quarterly, or a semi-annual basis. Examples of other account statements include brokerage statements, checking account statements, credit card statements, etc.
Account statements can be used to calculate total income, pending dues, and avoid disputes between business owners and individuals by keeping a record of all financial transactions.
An account statement gives an overview of a customer’s financial data, including showing transaction history during any billing cycles. Key components of account statements include:-
Financial account statements are used by investors, stakeholders, creditors, and lenders to evaluate the financial performance and management of assets within organizations. These documents are used for conducting financial analysis and classifying assets, liabilities, and liquidities. The main types of account statements which are of valuable importance are:
Income statements reveal the financial assets of an organization, including showing details about net profit and loss, sales, and earnings per share. It reveals the financial performance of both public and private organizations
Balance sheets contain information about assets, liabilities, and owners’ equity. It provides an overview of an organization’s financial standing at a specific point in time and shows what the company owns and doesn’t. The balance sheet is used for performing financial ratio analysis and is used in conjunction with income statements and cash flow statements.
3. Statement of Changes in Equity
Statement of changes in equity shows details about changes in shareholders’ equity at different points in the year. It lists a summary of business capital, retained earnings, beginning and ending balances, share reserves, additional paid-in capital, and how all these variables change throughout various time periods.
Cash flow statements help stakeholders understand how cash flows in and out of the organization. It gives a snapshot of the company’s finance management and provides insight into cash flow balance movements. How cash is utilized by the organization is also highlighted in these. Cash flow statements have namely three key areas of focus – Cash Flow from Operating Activities (CFO), Cash Flow from Investing Activities, and Cash Flow from Financing Activities (CFF).
Bank statements are used to record financial transactions that occur within an institution. It provides a summary of deposits and withdrawals month-by-month.
Account statements are used by multiple investors, lenders, and business owners to assess an organization’s financial liabilities, creditworthiness, and states of income and expenditure throughout the year. Many companies use automated data capture solutions to extract data from financial account statements and analyze relevant information.
Account statements are used in the following ways:-
If you want to automate data extraction for your bank statements and process your finances online without having to enter data manually, you can use a platform like Docsumo. Docsumo is a document AI software that automatically extracts data from your financial account statements, validates it, and structures it for streamlining accounting operations.
For more information on you can use Docsumo to audit your account statements, be sure to sign up for a free demo on the website.
In today’s dynamic business world, filing and archiving official documents in the digital form makes it handy, and works wonders in the future or in unforeseen circumstances.
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