What Is Account Analysis?
Account analysis is a process in which detailed line items in a financial transaction or statement are carefully examined for a given account. An account analysis can help identify trends or give an indication of how an account is performing.
In cost accounting, this is a way for an accountant to analyze and measure the cost behavior of a firm. The process involves examining cost drivers and classifying them as either fixed or variable costs. The cost accountant then uses the company's data to figure out the estimated variable cost per cost-driver unit or fixed cost per period.
When it comes to banking, account analysis takes the form of a periodic statement outlining the banking services provided to a firm. The statement is usually provided monthly and involves the display of all important account data, including the company's average daily balance and charges that the company incurs from the bank.
Account Analysis in Accounting and Banking
In accounting, account analysis is quite complex and involves an in-depth understanding of both the data and the company. It is usually performed by an experienced cost accountant, possibly with the help of one of the company's managers, who deals closely with the company's costs.
In banking, you can think about account analysis as similar to the statements you receive for your personal bank accounts. Since it is for a company account, however, it is much more detailed and on a larger scale.