What happens if a company is overdrawn on its bank account?

If a company is overdrawn on its bank account, it means it has withdrawn more money than is available, leading to a negative balance. This can result in overdraft fees charged by the bank, which can accumulate quickly. Additionally, the bank may require the company to deposit funds to cover the overdraft, and repeated overdrafts could damage the company's relationship with the bank, potentially affecting future credit or banking services. It's essential for the company to address the overdraft promptly to avoid further financial complications.