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What is an account statement?

An account statement is a document you can send to your customers, detailing the status of their account.  An account statement summarises the customers activity with your business for a set period of time i.e. the transactions undertaken between your business and the customer for the month, it also summaries the outstanding invoices from previous months.

 

When do you use an Account Statement?

If you provide credit terms to your customers you will need to send out regular “Account Statements” to your customers. An account statement is a great way to manage and control your account receivables and cash flow.  An account statement is designed to let your customers know the current status of their account; How much they currently owe now and pending invoices payable in the future.  Preparing your account statements will help you to identify those customers who have failed to pay for some time, and where corrective action should be taken i.e. suspension of the customers account untill full payment is made.  One of the keys to successfully operating a business is cash flow management you must stay on top of who owes what and when. If you miss manage your cash flow you may find even though you have made a lot of sales, many of your customers have outstanding accounts dating back months, this can result in a lack of cash flow to sustain immediate operations of your business.

Click here to see a sample Account Statement, Account Statement.pdf