An account statement provides important information, including fees charged by the vendor, a list of services provided, money owed by the client, and deposits made to the account. Because an account statement shows payments made by the client, it can result in a positive or negative ending balance.
Alternate name: Account statement
A non-business example of a statement of account is a bank statement. It lists all the transactions that happened during a specific time period, typically one month, which includes payments received and made. Although an account statement is usually sent electronically, it can be sent as a printed document to the client or customer’s physical address.
How a Statement of Account Works and Why It’s Important
A statement of account acts as a helpful tool for vendors to remind clients about outstanding payments. This is important because timely payments by clients can improve a vendor’s cash flow and allow the company to spend money on the resources it needs to maintain the business. An account statement is also important for clients because it allows them to accurately track their payments and spending. Payment reminders, with the help of account statements, can also help them save money by paying what is due immediately and avoiding any late fees. There are different aspects to a statement of account, including:
The vendor’s name and contact detailsThe client’s name and contact detailsThe statement dateThe client’s account numberThe previous balance (carried forward from the previous statement)All transactions (invoices and payments, each on its own line)
Account statements are important to check the consistency of records for a client’s account, too. The vendor can use them to verify that a client has paid the amounts due to them, and if there are any missed payments, the vendor can send a payment reminder to the client. If there are any double payments or charges captured in the system, you can review and verify all payments to ensure the accuracy of transactions. For clients who receive periodical invoices, a statement of account makes it easy to view all the invoices sent so that discrepancies can easily be rectified.
Types of Account Statements
In addition to business-related scenarios, statements of account can include credit card statements, insurance account statements, and bank account statements.
Credit Card Statements
Credit card statements list all transactions cardholders make, including purchases at a point of sale, and these transactions are reflected as they happen. When the credit card holder pays the credit card debt, the funds reflect in the account. At the end of the period, the card company sends out a credit card statement to the cardholder that shows all the transactions, the fees charged, and the balance.
Medical Account Statements
If you have a balance with a hospital’s billing department, you can expect to receive monthly statements that show your outstanding balance, payments you’ve made, payment due, and, in some cases, pending insurance claims.
