Customer statement of account
Definition
A customer statement of account is a summary sent to a customer listing all invoices, payments, and credits over a period, along with the balance owed. Unlike an invoice, it does not bill for new goods or services but shows the overall account status.
Formula
Closing balance = Opening balance + Invoices − Payments − Credits
Why it matters
Statements help customers see what they still owe and catch any disagreements early. Sending them regularly also nudges slow payers and reduces disputes at collection time.
Example
A printing company's statement for a client shows an opening balance of $1,000, a new invoice of $1,500, a payment of $1,200, and a $100 credit. The closing balance is $1,000 + $1,500 − $1,200 − $100 = $1,200, which matches the client's balance in accounts receivable.
Common questions
What is the difference between an invoice and a statement?
An invoice requests payment for a specific sale, while a statement summarizes all activity and the outstanding balance on a customer's account over a period.
How often should I send customer statements?
Many businesses send statements monthly, which gives customers a regular reminder of open balances and a chance to reconcile their records.
Related Terms in Invoicing & Sales
Dunning
The structured sequence of reminders sent to a customer with an overdue balance, escalating in tone and channel over time. Automating dunning is one of the most reliable ways to reduce days sales outstanding.
Collections
The process of pursuing payment on overdue invoices, from reminders and statements through payment plans to legal action or external agencies. Effective collections depend on accurate aging data and a consistent escalation policy.
Credit Memo
A document issued to reduce the amount a customer owes, used for returns, overcharges, agreed discounts or service failures. It can offset a future invoice or support a refund, and in VAT and GST systems it also adjusts the tax reported.
Remittance Advice
A note sent by a payer listing exactly which invoices a payment covers. Without it, part-payments and bulk transfers have to be allocated by guesswork, which is a common source of reconciliation delay.
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