A statement of accounts is a document that reflects all transactions that took place between you and a particular customer for a given period of time. Generally business owners send statements of accounts to their customers to let them know how much they owe for sales that took place on credit during that period. The guide walks you through the contents of statement of accounts and shows how to file this document for customers. Using Zoho Books, you can easily generate and share the statement of accounts with your customers in a single click. Your clients can also access this as ‘Customer statement’ from the client portal easily and handle their outstanding payments. Check out how our free online accounting software can help you generate the statement directly from the customer profile.
This can be beneficial for individuals in areas with limited connectivity or those who prefer to review their financial information offline. In case of technical issues or loss of access to electronic records (both temporarily or permanently), individuals can rely on their paper statements as a secondary source of information. The statement may also list financial information that relates to the account holder such as their credit score, or the estimated time it will take to completely pay off a debt via installment payments. A statement of account, also known as an account statement or customer statement, is a document that outlines the transactions between a buyer and a seller. In rare cases, the presence of large credits on a statement of account may reveal that the seller owes money to the customer, in which case a payment or ongoing credit is arranged. The recommended duration for keeping account statements varies, but it’s generally advised to retain them for a minimum of one to three years.
What is a Statement of Account?
A statement of accounts is a great way to provide your customers with a recap of the products and services that were billed to them. Statement also helps the business owners confirm the payments that the customer has already made for a statement period, which is generally a month. An account statement is a periodic summary of account activity with a beginning date and an ending date. The most commonly known are checking account statements, usually provided monthly, and brokerage account statements, which are provided monthly or quarterly.
The amount of invoices listed on the statement may be itemized into time buckets, so that the reader can easily determine which invoices are overdue for payment, and which are not yet due. The time buckets typically used are 0 to 30 days, days, days, and 90+ days. Depending on the accounting software, it may be possible to adjust the durations of these time buckets.
Terms Similar to Statement of Account
This is deducted from the total invoiced amount to get the current amount due.
- Some businesses may never send account statements to their customers, even if they’re used internally to get an overview of customer activity.
- It can even help catch transactions that have accidentally been run twice.
- Account statements provide a comprehensive overview of transactions, balances, and activities in a bank, financial, or other account.
- Degrees in both history and creative writing and earned her M.F.A. in creative writing in 2008, specializing in novel-length historical fiction.
At the other end of the spectrum, some businesses issue account statements regularly; this is particularly common among businesses with customers who often make purchases on credit. A statement of account is used as a collection tool, reminding customers of the amounts they owe to the issuer. They are most effective when issued within an email with a payment link, so that customers can pay at once with a credit card.
Income Statements
For example, an account holder or the financial institution might spot a charge for concert tickets or a luxury item that seems out of the ordinary. Account statements can be used for budgeting and financial planning by analyzing income, expenses, and patterns of spending. Review your statements to track where your money goes, identify areas for potential savings, and make informed decisions about budget adjustments or financial goals. If you notice an error or discrepancy on your account statement, contact your bank immediately. Provide them with the details of the incorrect transaction, and they will initiate an investigation to rectify the issue and ensure your account is accurate. Consider an account statement that tracks a company’s environmental impact from one period to the next.
Account statements refer to almost any official summary of an account, wherever the account is held. Insurance companies may provide account statements summarizing paid-in cash values, for example. Statements can be generated for almost any type of accounts that represent ongoing transactions where funds are repeatedly exchanged. This can include online payment accounts such as PayPal, credit card accounts, brokerage accounts, and savings accounts. Account statements should be scrutinized for accuracy, and historical statements are critical for budgeting. A credit or loan account statement, for example, may show not only the outstanding balance due but the interest rate charged on that debt and any fees that have been added during the payment cycle.
Statement of account – What is a statement of account?
This part also includes the account summary, which contains the opening balance, invoiced amount, amount paid, and balance due. Unlike invoices which follow strict legal guidelines, there are no official requirements for customer statements. The top half of the statement shows the name and address of both the business owner and the customer. Lisa Dorward was a corporate financial executive and business consultant for more than 15 years before becoming a writer in 2003. Degrees in both history and creative writing and earned her M.F.A. in creative writing in 2008, specializing in novel-length historical fiction.
The invoiced amount is the money that your customer is expected to pay for the goods or services that they received from your business during the current period. It also contains the time interval for which the statement has been prepared. In that case, the statement will show invoices and credit notes for the month.
