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How to read a startup’s bank statement

A startup founder should review and check their bank statements every month to stay abreast of the financial health of their business and identify any potential issues or areas for improvement.

Additionally, reviewing bank statements regularly can help detect and prevent fraud - something we actually see happen occasionally at funded startups! 

It’s the founder’s job to understand the company’s cash flow. We’ve talked a lot about watching burn rate and knowing cash out date - the bank statement has the company’s actual cash position! Monitoring the inflow and outflow of cash can give a startup founder a clear picture of their business’s liquidity and ability to meet financial obligations. By keeping a close eye on cash flow, a founder should have a better understanding of the burn rate.

A startup founder should read a bank statement to understand the financial health of their business and identify any potential issues or areas for improvement. Here are a few key items to look out for when reading a bank statement:

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How to Read a Startup’s Bank Statement

Key items to look out for when reading a bank statement:

  1. Beginning and ending balance

    The beginning balance is the amount of money in the bank account at the start of the statement period, and the ending balance is the amount of money in the account at the end of the statement period. Compare the two to see if the business has increased or decreased its cash position.

  2. Withdrawals

    Look for all the withdrawals made from the account during the statement period. These could be payments to suppliers, employee salaries, or other expenses. Compare these to the previous statement period to see if there are any notable changes or discrepancies.

  3. Fees

    Look for any fees charged by the bank during the statement period. These could include account maintenance fees, ATM fees, or other charges. Not all startup banks offer startups no-fee checking accounts, and sometimes unexpected account fees can pop up.

  4. Transactions with merchants

    Look for any transactions with merchants. If a business does not recognize a transaction, it may be fraudulent.

  5. Deposits

    Look for all the deposits made into the account during the statement period. These could be from sales, investments, or other sources of income. Compare these to the previous statement period to see if there are any notable changes or discrepancies.

  6. Bank Reconciliation

    Compare the bank statement to the company’s accounting records to ensure that all transactions are accounted for and recorded correctly. Not reconciling bank accounts is one of the major mistakes inexperienced bookkeepers make!

Deposits Withdrawals

By carefully reviewing the bank statement, a startup founder can gain a better understanding of their business’s financial health, identify potential issues, and make informed decisions to improve their financial performance.

How the best accountants want to see your bank statement

The best accountants - like us! - want (no, need!) access to your company’s bank statements. Not just so that we can read the statements to correctly input them into your accounting software. 

Instead, CPAs need access to the statements so that they can verify and reconcile the statements against the entries that are being recorded in your company’s books. 

Whey PDFs aren’t good enough

A lot of fraud starts with doctored bank statements. You can read here about a HUGE fraud where the company was forging bank statements. 

The best way to get your statements to an accountant is to use an API or direct feed into the accounting system. That’s a big reason why we insist on QuickBooks Online for our clients. When the numbers are pulled directly from the bank, it not only reduces the chances that there is fraud, it also removes a lot of data-entry errors. 


We are the experts at helping seed/VC-backed Delaware C-Corps with their accounting and finances!

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