Customers use a statement of account to check your figures against their own ledger and to see which invoices they still need to pay. You use it to bring missing invoices, unapplied payments and disputes to light before they turn into overdue balances. In banking the same term means the statement a bank sends for your account, but in receivables it means the customer statement.
What a statement of account includes
Most statements, and most statement of account templates, start with a header showing your details, the customer name and account number, the statement date and the period covered. The body lists transactions in columns.
- Date of each transaction
- Reference, such as the invoice, credit note or payment number
- Description or the customer's purchase order number
- Due date of each invoice
- Charges (invoices and debit notes)
- Payments and credits
- Running balance
Below the transactions, add an aging summary showing how much is current and how much is 1 to 30, 31 to 60, 61 to 90 and over 90 days overdue, the same buckets as an accounts receivable aging report. Finish with the total due, your bank details and a contact for queries. Some suppliers add a tear-off slip so the customer can say which invoices a payment covers, which does the job of a remittance advice.
Statement of account example
| Date | Transaction | Due date | Charges | Payments and credits | Balance |
|---|---|---|---|---|---|
| Sep 1 | Balance brought forward | $9,300.00 | |||
| Sep 5 | Invoice 1204 | Oct 5 | $3,600.00 | $12,900.00 | |
| Sep 12 | Payment received | $4,100.00 | $8,800.00 | ||
| Sep 20 | Credit note 31 | $300.00 | $8,500.00 | ||
| Sep 26 | Invoice 1215 | Oct 26 | $2,750.00 | $11,250.00 |
Example. The customer started September owing $9,300, made up of invoice 1182 for $4,100 and invoice 1190 for $5,200, due on September 10. During the month you issued $3,600 + $2,750 = $6,350 of new invoices, received $4,100 for invoice 1182 and gave a $300 credit against invoice 1190. Adding the new invoices gives $9,300 + $6,350 = $15,650, and taking off the payment and credit, $4,100 + $300 = $4,400, leaves a closing balance of $11,250. On September 30, invoice 1190 is 20 days overdue, so the aging summary shows $4,900 overdue ($5,200 minus the $300 credit) and $6,350 current.
Open item vs balance forward statements
The example above is a balance forward statement. It starts from the closing balance of the previous statement, lists the activity in the period and ends with a new balance. It is short, but payments reduce the total rather than specific invoices, so the customer cannot see which invoices are still open.
An open item statement lists every unpaid invoice and unused credit, whatever its date, with each payment matched to the invoice it paid. That suits B2B accounts where customers pay invoice by invoice. For the same customer it would show invoice 1190 at $4,900 after the credit, invoice 1204 at $3,600 and invoice 1215 at $2,750, and $4,900 + $3,600 + $2,750 gives the same $11,250.
Statement of account vs invoice
An invoice bills one sale and carries its own due date and tax details. A statement summarizes all invoices, payments and credits on the account, and it does not create a new debt or change any due date. In the UK, HMRC guidance says you cannot reclaim VAT using a statement, only with a valid VAT invoice, so a statement cannot replace the invoice.
When to send a statement of account
- Every month, soon after you close the books, so customers can reconcile before their own payment run.
- Before you chase, so a missing invoice or unapplied payment comes up before a dunning letter does.
- Whenever a customer asks for one or questions a balance.
- Before year end, when auditors may ask customers to confirm the balance they owe you.
- With a letter of claim. In England and Wales, the Pre-Action Protocol for Debt Claims lists an up-to-date statement of account, including interest and charges, among the documents to enclose when you claim a debt from an individual or sole trader.
Sunbay keeps the same picture current between statements. It reads invoices and posted payments from your ERP or accounting system, shows each customer's open items and aging, and keeps every reply and agreement next to the invoice it concerns, so you can see where every invoice and payment stands.
Frequently asked questions
What is the difference between a statement of account and an invoice?
An invoice asks for payment for one sale and sets its due date. A statement of account lists all invoices, payments and credits on the customer's account and shows the balance. Customers pay against invoices and use the statement to check their records.
How often should you send a statement of account?
Monthly is the usual rhythm for business customers, sent soon after month end. Send an extra one before a collection call, after a dispute is settled and whenever a customer asks.
What is the difference between open item and balance forward statements?
An open item statement lists each unpaid invoice and credit, with payments matched to specific invoices. A balance forward statement starts from the previous balance, adds new invoices, subtracts payments and credits and shows the new total.
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