Balance Reporting
What it is:
Balance reporting is the act of communicating the balance in an account.
How it works (Example):
Banks do balance reporting when a customer inquires about the balance in an account. For businesses, balance reporting is often more complicated. Businesses require balance reporting from banks in real-time so that they see the amount of cash in their accounts at all times, which is especially important for companies that operate in several time zones or internationally.
Why it Matters:
Balance reporting used to be something that banks could do only once a day, but with improvements in technology, up-to-the-minute balances are often available around the clock.
In personal finance, balance reporting is important because it prevents people from overdrawing accounts and helps them manage their cash. In the business world, cash management is a full-time, important job, and balance reporting ensures that companies always have enough cash to pay employees and other expenses, as well as analyze their performance.
