What is an Account Statement?
A statement of account is a report sent to your customers to show how much money they owe. It is a list of all the invoices and credit notes that are outstanding. An invoice is issued to a client when goods or services are sold on credit.
The statement of account will include the following information, contact details, invoice date, reference number, details, amount due and how to pay. The amount outstanding may also be split between current invoices (not due for payment), 30-60 days overdue, 60-90 days late and 90 days and over.
It is essential to ensure that you put on all your contact details, so if they have a problem, they know where to get in touch. Include the Business name, address, telephone number, email address and any other contact details that you may have.
A customer will use a statement to check that the invoices and credit notes they have on their accounting system match the details on the report.
When to send out a Customer Statement
A business should complete issuing statements of account at least once a month. A good time to send them out is at month-end, but if you know when a customer has a payment run, it is worth sending it out before the run so that they can check their records.
Some businesses will only pay their account after they have received a statement. It can be a delay tactic to make a payment but also ensures their records are correct and they do not have to issue a second payment for missing invoices.
Statement of Account Template
If you are using an accounting software package like QuickBooks, Xero or Sage, the report will be available within the software. It is possible to email it directly from the software to the client, to save time and postage. You can even automate the issue of statements of account to send on a specific day.
If you are using a manual system, we have created a statement of account template which is free to download.
Features of our template:
- The brand with your logo
- Enter all your business contact information
- List all invoices and credit notes outstanding
- Automatically totals amount outstanding
- If customer ticks invoice paid it will total amount up
- Remittance advice
- Payment details
Statement of Account Example
Below is an example of the template in use.
Statement of Account – Remittance Advice
Most Statements include remittance advice. It can be detached and sent back with payment. It is an easy way of advising which invoices are paid. The customer will either pay the amount in full or may mark the items paid. Most customers will send their own remittance advice when payment is made from their accounting system.
If payment is very overdue and you have tried to contact the customer, provided a statement of account and a letter, the next step is to issue a 7-day debt collection letter. Attach a copy of their statement to the letter, or list the invoices and credit notes in the letter. It will make sure that they have all the details.
If payment is still not made after the 7 days, it is best to follow through with the collection in the courts. You do not have to pay someone to complete it for you, as you can do it directly with Money claim online. The service is easy to use and provides full guides on how to use it.
Statement of Account Overview
- Complete at least once per month
- Accounts systems can automate sending statements.
- Include all invoices/credit notes
- Include where to make payments
- Brand your statement