What Is an Itemized Statement?

An itemized statement is a periodic document issued by a financial institution, such as a bank or brokerage firm, to its customers detailing all account activity for the period. Itemized statements include deposits, credits, debits, fees, and all other pertinent activity. Usually, this information is presented in chronological order, although it may be broken down in several different ways for the customer's convenience.

Key Takeaways

  • An itemized statement is a periodic document issued by a financial institution or another provider to its customer detailing all account activity for that period.
  • Itemized statements show deposits, credits, debits, fees, and all other pertinent activity.
  • A customer can obtain an itemized statement monthly via mail or can access their account through their bank's provider to view their activity on a daily basis.
  • An itemized statement helps an individual keep track of their cash inflows and outflows and is useful in budgeting.
  • Legal authorities, such as the Internal Revenue Service (IRS), also examine itemized statements to investigate possible tax fraud or other illegal activities, such as money laundering.

Understanding an Itemized Statement

Itemized statements can be issued for many types of accounts and financial products. Itemized statements of bank card accounts will list the names of all debiting merchants next to each terminal entry. ATM locations are typically listed for debit card withdrawals. Itemized statements used to be considered a premium service for preferred customers by many institutions but computerized record-keeping has made them commonplace today.

In today's world, there are many e-commerce platforms that handle payments and transactions electronically. Sites like PayPal, Venmo, and Stripe handle more and more payments these days. They also provide detailed itemized statements for online merchants and all of their customers.

How to Obtain an Itemized Statement

Itemized statements are created and provided by a bank or service provider, such as PayPal. Before the advent of the Internet, itemized statements would be mailed monthly to a customer for their review and bookkeeping purposes. Itemized statements can also be obtained by visiting a bank branch and requesting one from a teller.

With the widespread use of the Internet, bank customers can now access their itemized statements online via their bank's portals. These are not only available monthly in statements but can be viewed on a daily basis as transactions are made.

Benefits of an Itemized Statement

As itemized statements document the outflows and inflows of cash, they are an important tool for individuals in understanding their finances. Through itemized statements, individuals can see how much money they spend on travel, groceries, and other items. This allows them to create a budget to work within the cash inflows, also detailed on the itemized statement. It would be difficult for an individual to create a budget without knowing where their money is being spent.

Itemized statements are also important because they can help detect fraud. If an individual notices charges on their itemized statement that they did not make, they are alerted to possible identity theft or other fraud. They can stop the payment, cancel any debit or credit cards, and have their bank investigate the theft.

The Internal Revenue Service (IRS) also looks at itemized statements when investigating tax fraud. Other legal authorities also look at itemized statements to determine any criminal activity, such as money laundering.

Example of an Itemized Statement

For example, Bert has a brokerage account and bank account with XYZ Bank and Brokerage. Every month, he receives an itemized statement breaking down all of the trading, credit, debit, and fee activity within his account.

Bert received $2,000 from his employer, Book Shoes Shop, as salary on June 6. On June 7 he paid his landlord, Rental Homes, $700 in rent through a check that was cashed on June 9. On June 12, Bert spent $100 on groceries at Food Co. On June 12, Bert also sent $500 to his online investment account at Fidelity. On June 18, he received another $2,000 in salary from his employer. Bert's itemized statement for the month would look as below:

Date Description Credit Debit
6/6 Book Shoes $2,000  
6/7  Rental Homes   $700
6/12  Food Co   $100
6/12 Fidelity   $500
6/18  Book Shoes $2,000