What is a Statement of Account?

Statement of Account

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Statement of Account

A Statement of Account is a detailed report or record prepared by a supplier or service provider which lists all the transactions that have taken place between the supplier and the customer over a specified period. It’s typically used to show the balance of what’s still owed by the customer (or sometimes, what’s owed to the customer in cases of overpayments).

Key features of a Statement of Account include:

  • Header Information: The name and contact details of the supplier, the name and address of the customer, the statement date, and any relevant statement number or reference ID.
  • Opening Balance: The amount due at the beginning of the statement period. This is usually the ending balance from the last statement.
  • List of Transactions: This typically includes:
    • Date of the transaction
    • Description or reference (like invoice number or payment receipt number)
    • Debit amounts (amounts charged to the customer)
    • Credit amounts (payments made by the customer)
    • Any applicable discounts, refunds, or adjustments
  • Closing Balance: The total amount still owed by the customer at the end of the statement period. It’s computed by adding all the debits, subtracting all the credits, and then adding/subtracting this net amount to/from the opening balance.
  • Duration: The statement covers a specific period, like a month or a quarter.
  • Payment Terms: Any information regarding due dates for the outstanding balance, interest charges for late payment, or benefits for early payment may also be included.

Example of a Statement of Account

Let’s delve into a more detailed fictional example of a Statement of Account.

Statement of Account

Golden Electronics
123 Tech Avenue, Electron City, EC 12345
Phone: (123) 456-7890
Email: support@goldenelectronics.com

Bright Innovations
456 Startup Blvd, Innovate Town, IT 65432

Statement Date: July 31, 2023
Statement Period: July 1, 2023, to July 31, 2023

Opening Balance (as of July 1, 2023): $2,000.00

Transaction Details:

DateDescriptionInvoice/Receipt No.Debit ($)Credit ($)
July 5Purchase – LaptopINV-0723-01$1,200.00
July 10Purchase – TabletINV-0723-02$500.00
July 15Payment ReceivedREC-0723-15$1,500.00
July 20Purchase – RouterINV-0723-03$300.00
July 24Payment ReceivedREC-0723-24$1,000.00
July 28Purchase – MouseINV-0723-04$50.00

Closing Balance (as of July 31, 2023): $1,550.00
(Opening Balance + Total Debits – Total Credits)

Payment Due Date: August 15, 2023

Any payments made after the statement date will reflect in the next statement. Please reference invoice or receipt numbers when making payments or inquiries.

In this example:

  • Bright Innovations began July with an amount due of $2,000 to Golden Electronics.
  • Over the month, Bright Innovations made purchases that totaled $2,050 (sum of all the debits).
  • They also made payments amounting to $2,500 (sum of all the credits).
  • By the end of July, Bright Innovations owes Golden Electronics a total of $1,550.

This Statement of Account gives a clear and organized view of all the transactions between Bright Innovations and Golden Electronics for the month of July. Bright Innovations can use this to reconcile its records, understand its outstanding balance, and make necessary payments by the due date.

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