What is Balance Reporting?

Balance reporting is the process of making a report to clients regarding the current status of balances in their accounts. The term is most commonly associated with the processes used by banks and other financial institutions to relay financial information to customers regarding recent transactions on their accounts and the balances that are now available for use. More recently, the concept of balance reporting has been used to refer to activities where suppliers provide clients with up to date information on balances in revolving accounts, including the recent assessment of any finance charges of fees on the outstanding balance.

The communication inherent in balance reporting is often helpful for clients, in that the data received from the supplier or bank makes it much easier to manage those financial resources to better effect. For example, an individual who has a checking account with a bank is much less likely to accidentally overdraw the account if it is possible to obtain a report of the current balance on at least a daily basis. When coupled with the ability to obtain information about the most recent credits and debits to the account, this further minimizes the chances for an overdraft, since the customer can check those reported activities with those recorded in the personal check register. Doing so makes it possible to quickly identify any discrepancies, and resolve them before the balance is compromised due to some type of recording error.

Just about every type of financial institution engages in some type of balance reporting. In times past, manual accounting methods limited the ability to receive up to date balance reporting detail to once a day. Many banks would post all types of debits and credits to accounts overnight, making it possible for customers to receive updated information on account balances the following morning. As more banks began to make use of automated means to keep balance information, it became easier to receive updated data more than once a day. Today, it is not unusual for a bank to provide clients with information about all transactions that occurred up to midnight the night before, and also show pending transactions that have been received and will be posted at the end of the current business day.