Statement of account: what it is and how to send one (with a template)

A statement of account is a dated record of a customer's account with your business. It answers one question: on this date, what does this customer owe us, and how did we get there?

Most accounting systems can produce one from the invoices and payments you have already recorded. Check it before it goes out, because a statement repeats every error already in your ledger.

A useful statement includes:

• Your business details: name, address and a contact for account queries.
• The customer's details: legal name, billing address and their account number with you, if you use one.
• The statement date and period: for example, "Statement as at 31 October, covering 1 to 31 October".
• Opening balance: what was owed at the start of the period.
• Each transaction in the period: date, reference, description, amount. Invoices increase the balance. Payments and credit notes reduce it.
• A running balance, so anyone reading it can follow the arithmetic line by line.
• Closing balance: the total owed on the statement date.
• An aging line: how much of the closing balance is current, 1 to 30 days overdue, 31 to 60, and so on.
• How to pay: bank details or a payment link, and the reference you want them to quote.

The aging line matters most for collections. It tells the customer which money is late without a separate email. Our guide to the accounts receivable aging report explains the buckets.

Ask customers to pay against the invoice references, not the statement, or payments arrive with a reference that matches nothing in your system.

Open item statement

Lists every invoice that is still unpaid, whatever its age, along with any part payments and credits against it. Paid invoices drop off.

This is the better format for most service businesses. The customer's accounts payable team can match each line against an invoice they hold, and anything they do not recognize stands out.

Balance forward statement

Starts with the closing balance from the last statement, then lists only the activity in the current period.

It is shorter and suits customers who pay the whole balance each month. It is harder to reconcile, because an old unpaid invoice is buried inside the opening balance.

• Monthly, to any customer with more than one open invoice. It is routine, so it never reads as chasing, but it still puts overdue items in front of the person who pays.
• Before you escalate a late invoice. If you are about to send a firmer email, attach a statement first. It often surfaces a payment you have not applied or an invoice they never received.
• When the customer asks. Accounts payable teams request statements to reconcile their ledger. Answer quickly. A customer reconciling their account is getting ready to pay.
• When a contact changes. A new person in accounts payable has no history. A statement gives them everything in one page.

Say a design studio bills a client a monthly retainer of $4,000 on 30-day terms, plus project work. The client paid the August retainer on 3 October and received a $500 credit for a cancelled deliverable on the September retainer. The open item statement at 31 October looks like this:

The August retainer, paid in full on 3 October, has dropped off.

Closing balance as at 31 October: $13,500

Anyone reading it can see the $3,000 that is more than 30 days late, the $3,500 that is just overdue, and the $7,000 that is not yet due. All figures are invented to show the format.

Copy this into a document or your invoicing tool's statement layout.

STATEMENT OF ACCOUNT

[Your business name]
[Your address]
Account queries: [Name], [Email], [Phone]

To: [Customer legal name]
[Customer billing address]
Account number: [Account number]

Statement date: [Statement date]
Period: [Start date] to [End date]

Date        Reference     Description              Amount      Balance
[Date]                    Opening balance                      [Amount]
[Date]      [Invoice no]  [Description]            [Amount]    [Balance]
[Date]      [Payment ref] Payment, [Invoice no]    -[Amount]   [Balance]
[Date]      [Credit no]   Credit, [Reason]         -[Amount]   [Balance]

Closing balance as at [Statement date]: [Amount]

Current: [Amount]   1-30 days: [Amount]   31-60 days: [Amount]   61+ days: [Amount]

Please pay against the invoice numbers above, not this statement.
Payment details: [Bank name], [Account name], [Account number], [Routing or sort code]
Reference: [Customer account number or invoice number]

If anything here does not match your records, contact [Name] at [Email]
within [Number] days so we can resolve it before the next statement.

A statement on its own is easy to file and forget. A short cover email tells the reader what you want them to do with it.

Routine monthly statement

Subject: Statement of account for [Customer name], [Month]

Hi [First name],

Attached is your statement of account as at [Statement date].
The closing balance is [Amount], of which [Overdue amount] is past due.

Could you let me know when the overdue invoices are scheduled for payment?
If anything does not match your records, reply and I will look into it.

Thanks,
[Your name]

Statement before escalating an overdue invoice

Subject: [Invoice number] and your account balance

Hi [First name],

Before I follow up on [Invoice number] again, I want to make sure we are
looking at the same numbers. Your current statement is attached.

Our records show [Overdue amount] past due, with [Invoice number] the
oldest at [Days] days. If you have paid any of these, could you send the
payment date and reference so I can match it?

Otherwise, please confirm the date you expect to pay.

Thanks,
[Your name]

For anything more than a few weeks late, use the escalating wording in our past due invoice email templates, with the statement attached.

If the customer shows a different balance, work out why before you chase. The usual causes:

• A payment in transit. They paid after your statement date, or the money has not cleared.
• An unapplied payment or credit. You received the money but did not match it to an invoice, so it still shows as open.
• An invoice they never received. It went to the wrong address or an old contact, or is sitting unapproved with someone outside accounts payable.
• A short payment. They paid less than the invoice, perhaps deducting a fee or a disputed item, without telling you.
• A disputed invoice. They have it on hold and have not told the person sending your statements.

Agree line by line which invoices are open, then follow up on those. If an invoice is disputed, stop chasing it and resolve the dispute first. Our guide to collecting unpaid invoices covers what to do for each reason a customer has not paid.