A statement of account is the documentation of transactions between your small business and your clients within a specific time frame. This document is a full overview of the business completed between you and a customer, typically within a monthly period.

So how should small businesses create and utilize statements of accounts?

Statement of accounts vs. invoice

Invoices and statements of accounts are not the same thing. A statement of account is a complete record of transactions between a company and a client within a monthly period, and contains a list of all invoices created within that period.

While a sales invoice is a bill for one transaction only, a statement of account refers to a complete list of all invoices attached to that client within a stated period. This document is handy for both small businesses and their clients, as it shows the monthly transaction history and account activity between the two, in one place.

Creating invoices through Excel sheets can increase the risk of mistakes, which can reflect poorly on your business and the subsequent account statement. In order to mitigate this risk, it's best to use accounting software that will automatically update and organize client transactions. Keeping proper invoice documentation will make the process of creating statements of accounts effortless.

Why are statements of accounts important?

A statement of account reflects the ongoing transactional relationship between your business and your clients. This financial overview is vital for both the company and the client, as it illustrates the overall working relationship between the parties.

The main reason behind creating this statement is to show the outstanding amount, if any, a client may owe to your small business. Similar to a bank statement, this document illustrates the customer’s transactions on a monthly basis.

Sending out customer statements

A statement of account might look like a monthly statement issued to a client. Typically, companies issue monthly statements to their clients with up-to-date transactions, often as a PDF file sent via email.

Sending off a statement of account to a client at the end of the month is a good way to point out if they have any overdue accounts. Accounts receivable is the money owed to a business by the client, which can be found in these statements.

If a customer’s statement displays a zero balance then they are up to date on all payments. Typically, customers who have zero balances do not need to be sent this document unless they specifically request it. However, customer statements are still used internally within a business to keep track of financial reports and transactional history when managing customer relations and in case of disputes.

If your small business offers customers the ability to make purchases on credit, these statements should always be sent out to the clients at the end of the month to bring awareness to any overdue credit and outstanding payments.

Statement of account template

There is no set number of entries you need to include in an account statement. Your entries will reflect the number of invoices and billing statements that have been sent out by you to specific clients in the time frame stated.

Download a Statement of Accounts Template

Essential parts of an account statement include:

• Client Information: Always include the client’s information at the top of the document to illustrate who the account holder is.
• Company Information: As with all documents and reports created by your company, they should contain the business name, contact and location information.
• Date: State the date range which the statement falls under, this is typically a monthly span, but sometimes quarterly or yearly account statements are also issued.
• Account Summary: Displayed at the top of the accounts statement, this provides an overview of the current transactional balance between business and client, including previous balance, credits, new charges, and total balance due.
• Invoice Number: All invoice amounts sent out within the date range must be listed in the main body of this document, breaking down the charges and in chronological order by date.
• Charges: The amount charged per invoice given.
• Credits: This is the amount owed for the account, minus all payments made, or credit available.
• Account Current Balance: This is the amount owed by the customer that must be paid to your company at the time of the statement.

Quickbooks Accounting Software offers invoicing and statement software to simplify the process for your business and keep customer accounts organized and up to date. Why not try it free for 30-days?