What effect do bank service fees have on a company's cash balance?

Bank service fees result in a decrease in a company's cash balance because these fees represent costs incurred for maintaining the bank account and its associated services. When a bank charges these fees, they are deducted directly from the company's cash balance, thereby reducing the total amount of cash available. This is a reflection of the company's financial outflow resulting from banking services. Companies must account for these fees in their cash management practices, as they can impact cash flow and overall financial health. By recognizing these expenses, a company can ensure accurate monitoring of its cash position and make more informed financial decisions.