Statements of Account and how to use them
What is a statement of account?
A statement of account is a summary of all transactions between your business and a specific customer during a set time — for example, all purchases, returns, credits and payments they have made during a billing period. They’re a useful way to give your clients or customers an overview of what they've purchased and what they owe.
Why are statements of account important in business?
Statements of account are important for business owners because they outline all the products and services supplied to a customer in the payment period. For businesses that supply high volumes of products or services, they're a valuable way to track sales and payments and avoid confusion about repeat orders or missed payments.
Businesses send statements of account in addition to standard invoices. For example, you may invoice your client separately for purchases made over a period, but they’ll receive one statement of account for the period. You can send a statement of account as a reminder notice to late-paying clients, on a client's request to clarify money owing, or as a standard part of the billing process.
Example of a statement of account
Here's an example of a statement of account. At the top of the page is the business name and the account balance. The lower part is a detailed rundown of the month's invoices, payments and money owed. The final figure is the total amount owed by the client.
What to include on your statement of account
Include these details on your statement of account to ensure your client has all the information they need.
Header:
Name and contact details of your business
Name and contact details of client’s business
Date issued
Account summary:
Period the statement of account covers – for example, 1-31 December 2024
Opening balance: money owed from the previous payment period
Invoiced amount: money the customer owes for goods and services provided
Amount paid: money the customer has already paid during the payment period
Balance due: the remaining amount the customer needs to pay
Itemised transactions:
Date of each transaction
Invoice number or reference number for each
A brief description of the transaction – for example, ‘Sale’ or ‘Refund’
The invoice amount
The amount paid or the amount still owing
Total amount outstanding
Payment:
Payment date and details — for example, late payment fees
Payment methods — include as many as possible
Contact details — how customers can get in touch if they have an issue
What are the benefits of a statement of account?
The key benefits of a statement of account include:
Clarity
Give your customers a clear, accurate summary of all their purchases and payments.
Accuracy
Allow your customers to compare your records of transactions with theirs to check both parties’ records match
Faster payment
A statement of account is a payment reminder for your clients.
When should a statement of account be issued?
A statement of account should be issued as part of your standard billing process, when a client asks, or when a payment is overdue. While no law says a statement of account must be sent out every month, many businesses send them monthly or quarterly to ensure customers know exactly what they owe.
If you’re operating a business in Australia, your company is legally obliged to send an itemised statement within seven days if a client or customer requests one.
Statement of account FAQs
Is a statement of an account an invoice?
A statement of account isn't an invoice. It's a summary of all invoices and transactions between your business and a client in a set period.
Can a statement of account be used as a GST receipt?
A statement of account shouldn’t be used as a GST receipt in Australia and New Zealand.
What are some red flags on a statement of account?
Common red flags on a statement of account for business owners include money owed over multiple months, continual late payments, and frequent refunds to a client. These signs can indicate that a client is struggling to keep up with payments or is looking for ways to avoid paying their bills.
How long should you keep account statements?
Unlike invoices, you don't need to keep account statements for tax purposes.
Who issues a statement of account?
A business issues a statement of accounts to a client or customer as an overview of their transactions for the previous payment period.
Make statements of account quick, simple and clear
A statement of account is a valuable way to sum up a client’s purchase and payment history so you know what they’ve paid and still owe. It can be a valuable tool to help reduce late payments and missed invoices. It’s also a way to spot missed payments, clear up accounting inaccuracies, and keep track of complex transactions with individual clients.
MYOB’s accounting software makes generating and sending statements of account simple. You can manage all your accounting processes on a single cloud platform, track every transaction and keep accurate records for yourself and your clients. It’s about making life simpler for Australian and New Zealand SMEs. Ready to get your accounts organised? Get your free trial now.
Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.