What is a statement of account?

Definition

A statement of account is a customer-facing list of open invoices, credits, and payments as of a given date. It is a document about accounts receivable, not a new account you post to.

The customer sees every still-open bill and the running balance in one place. Sending it does not create revenue or change the books by itself.

Where it shows up

Balance sheet: Related to the open receivables the statement lists.

P&L: Related to nothing extra.

Cash flow: Related to nothing until those invoices collect.

See also: Accounts Receivable · Invoice · Collections

When you look at the Balance Sheet, the statement should add up to that customer's share of accounts receivable in current assets. If the statement total and the customer balance in the ledger disagree, something was billed, paid, or credited off the statement.

Cash on the Statement of Cash Flows does not move when you print the page. Cash moves when the listed invoices actually collect.

The Income Statement is not involved. Revenue was recorded when the sales were earned, and the statement only recaps what is still unpaid.

How it works

The statement pulls every open invoice for one customer, plus recent payments and credits. It usually shows the invoice date, number, original amount, payments applied, and the amount still due.

How a statement of account usually works:

• Pull every open invoice for one customer, plus recent payments and credits
• Show invoice date, number, original amount, payments, and amount still due
• Beginning balance + charges − payments/credits = ending balance
• Send on a schedule (often monthly) or with a reminder
• Nothing journals when you send it; cash application happens when they pay

A beginning balance plus new charges minus payments and credits should equal the ending balance. That ending balance should match the customer's accounts receivable detail in the ledger.

You send it on a schedule, often monthly, or when a customer asks what they owe. Follow-up teams also attach it to a reminder so the customer can see all open items, not just one invoice.

Nothing journals when the statement is issued. If the customer pays from it, someone later matches the cash to the listed invoices in cash application.

The customer may send remittance advice with their check explaining which invoices they meant to cover. That note is not the statement; the statement is what you sent them.

Credits appear as reductions on the page. A credit that cuts what the customer owes shows as a negative line so they do not pay an invoice that was already reduced.

Open items can be current or past due. The statement lists them together, and an aging report is the internal view that splits the same balances by age.

Example

A florist sends a cafe a one-page list of three open bread invoices: $180 dated March 2, $220 dated March 16, and $150 dated April 1. The statement shows no payments yet and an ending balance of $550.

The cafe's bookkeeper can see all three bills at once instead of hunting emails. The florist posts nothing for sending the page.

If the cafe pays $400 and notes it covers the March invoices, the next statement should show only the $150 April bill. Until that payment is applied, the Balance Sheet still holds all $550 in accounts receivable.

The Income Statement does not move because the statement went out. Those bread sales were already earned when they were billed.

Common mix-ups

A statement of account is not an invoice. An invoice bills one sale and creates a receivable, and the statement recaps several invoices that are already on the books.

A statement is not a dunning notice. A dunning notice is a reminder that something is late, and a statement is the list of what is open, whether or not it is past due.

A statement is also not the customer's payment note. That note explains which invoices a payment covers, and the statement is the list you sent them first.

Related terms

• Accounts Receivable: Money customers owe the business for goods or services already delivered.
• Invoice: The document that bills a customer and creates a receivable.
• Collections: The process of following up on unpaid customer invoices.
• Dunning: The sequence of reminder notices sent as an invoice ages past due.
• Remittance Advice: The note from a customer explaining which invoices a payment covers.
• Accounts Receivable Aging: A report bucketing open invoices by how long they have been outstanding.
• Cash Application: Matching incoming customer payments to the right open invoices.
• Credit Memo: A document that reduces what a customer owes.