Use a four-pass statement review
- Confirm the account and period.Check ownership, statement dates, page continuity, opening and closing balances, and obvious inconsistencies.
- Classify inflows.Separate likely operating deposits from transfers, funding proceeds, owner support, refunds, and other non-operating activity.
- Measure liquidity behavior.Review average balance, lowest days, negative days, NSFs, returned items, and how quickly deposits are consumed.
- Map recurring obligations.Identify likely loan or MCA payments, compare them with disclosed positions, and document what requires verification.
Worked deposit-classification example
| Item | Amount | Treatment for this example |
|---|---|---|
| Gross deposits | $150,000 | Starting total |
| Inter-account transfer | ($20,000) | Remove to avoid double counting |
| MCA funding proceeds | ($25,000) | Remove as financing, not sales |
| Owner contribution | ($5,000) | Remove as non-operating support |
| Estimated operating deposits | $100,000 | Subject to verification |
The example is deliberately simple. Real classification depends on transaction descriptions, counterparties, frequency, supporting documents, processor statements, and the funder's rules.
Turn observations into defensible questions
This sequence prevents an underwriter from converting an unexplained transaction directly into a factual conclusion. Observe first, ask second, verify third, then apply policy.