Top Mistakes to Avoid While Conducting Bank Statements or Financial Analysis

Whether organizations are looking forward to growing, hiring, investing, or selling, the execution of in-depth, precise bank statement analysis or financial analysis can be pivotal. The use of a reliable and feature-rich bank statement analysis software solution can help significantly.

It is because, most often, businesses out there tend to commit common yet preventable mistakes. Let’s try to understand some of the common pitfalls organizations can avoid with the help of a reliable bank statement analysis software solution.

What is Financial Analysis?

Bank statement or financial statement analysis is the core process of taking an in-depth overview of budgets, the entire business, and other types of financial data and reports.

During the comprehensive process, experienced analysts aim at analyzing the overall financial performance of the company.

Typically, financial analysts aim at understanding whether a particular market domain or a company is profitable or sustainable enough to merit starting or additional spending or investing.

In case the analysts are analyzing a single business, they will conduct in-depth observation into different financial aspects like balance sheets, profit & loss reports, and cash flow to ensure similar conclusions.

It is the responsibility of financial analysts to offer assistance with financial modeling, budget forecasting, KPI or Key Performance Indicator tracking, dashboarding, pricing analyses, investor reporting, and labor cost management.

What are the Common Mistakes Made During Financial Analysis?

#Executing Financial Analysis with Incomplete or Inaccurate Data

In most cases, organizations might start the process of financial analysis without preparing themselves for overall success. Organizations mostly end up starting their analyses with incomplete or incorrect data.

This can have significant implications for well-meaning, reputed organizations.

Eventually, it is data that helps in guiding the recommendations of analysts towards ensuring company leadership. Therefore, the delivery of misinformation can produce inaccurate budgets, poor business decisions, and unwise investments.

All organizations are expected to make sure -with the help of relevant hiring, auditing, and training, that the best data reporting and bookkeeping practices are understood and executed.

In this way, when the financial analysis is conducted, the organization is able to make decisions correctly and confidently. The use of feature-rich bank statement analysis software can also help.

#Hiring Poorly Matched or Inexperienced Analysts

Most organizations tend to believe that all financial analysts are interchangeable. As a matter of fact, there are different types of analysts. You can come across insurance underwriters, corporate financial analysts, bank statement analysts, and so more.

Hiring the right team of experienced professionals to conduct vital analyses of your company’s finances is of utmost importance.

Your organization should not be entirely dependent on the first bank statement analyst you interviewed to make high-rewarding, high-risk recommendations to the organization.

Rather, you should take ample time to make sure that your business gets matched with an experienced analyst with a relevant background as well as the experience needed to understand the company and its overall competition.

#Not Looking at the Big Picture

Even the most talented and experienced financial analysts can make the mistake of not looking at the bigger picture while delivering recommendations to the organization employing them.

For instance, a large-scale organization might want to acquire another business selling AI-powered software solutions. The software might require the presence of more than just a business-centric financial analyst to ensure informed decisions about the particular acquisition.

The business should consider checking in with financial analysts capable of understanding the rapidly shifting technology market. The analysts should also be highly experienced in high-end acquisitions.

Your business should not aim at hiring a full-time analyst to get an overview of the entire story. Your company can leverage the benefits offered by a tech-centric financial statement analysis software solution to help you make major decisions as per the requirement.

#Not Implementing a Sound and Well-structured Financial Plan

Most businesses tend to go wrong with the perspective of finances when they do not plan out the existing finances. It is recommended to always possess a pragmatic vision offering ample direction and assisting you to structure a dedicated financial plan depending on it.

When you are vague or indecisive with your financial goals, it will only delay your overall plans. Eventually, your financial planning will become more complicated than ever before.

Additionally, you are also expected to update as well as review the existing financial plan at regular intervals. This will allow you to ensure any changes that can help you in maximizing your investments and achieve your goals in a resourceful manner.

#Not Monitoring Cash Flows

Most entrepreneurs believe that sound financial management of the organization includes management of the bank account of the company, a monthly check of the given income statement, and ensuring tax liability.

They might have heard about cash flow management, but might not be aware of using it wisely.

It is important to understand that most successful entrepreneurs keep a note of the cash flows diligently. With the help of dedicated cash flow overview, they are capable of executing it financially and effectively. This will allow them to take top-quality managerial decisions.

When you are ignorant of future expenses and incomes, it will be economically dangerous for your company. When you do not keep a detailed track of the existing finances, you are not managing them. Therefore, you are not prepared for the future.

A user-friendly financial statement analysis software solution can help you in this aspect significantly.


If your company is new to the concept of financial statement analysis or you might be at risk of executing such common mistakes, you can leverage the wide range of benefits offered by a reliable bank statement analysis software solution like Perfios.

Also read: Bank statement verification is now faster with automation

Perfios leverages the automated approach to conduct financial statement analysis for analyzing bank statements, blending useful techniques with a dedicated learning engine to offer real-time analytical capabilities.