Statement of Account

A statement of account is a document a business sends to a credit customer summarizing every transaction on their account over a period, usually one calendar month, and ending in the balance owed. It lists invoices raised, payments received and credit notes applied. It is not a demand for payment and it creates no accounting obligation for the recipient - it tells the customer what the seller's records show, and asks them to agree or query it before the balance turns into aged debt.

The same document read from the other side of the trade is a supplier statement: what your supplier says you owe them. The two are checked against each other at month end, and where they disagree the cause is almost always timing - an invoice raised but not yet received, a credit note applied on one side only, or a payment in transit.

What a statement of account lists

A statement runs down the account in date order and arrives at a closing balance. A one-customer example for the period 1 September to 30 September 2026:

1. Opening balance brought forward: £4,250.00.
2. 3 September, invoice 10241: £1,800.00, taking the running balance to £6,050.00.
3. 11 September, credit note CN-118 against invoice 10233: minus £240.00, running balance £5,810.00.
4. 18 September, payment received by bank transfer: minus £4,250.00, running balance £1,560.00.
5. Closing balance at 30 September 2026: £1,560.00, of which £1,560.00 is not yet due.

Alongside the transaction lines, a statement carries your business name and contact details, the customer's name and account reference, the statement period, your payment terms and your bank details. Anything else is decoration.

Statements come in two forms and the difference matters. An activity statement lists everything in the period including invoices already settled, which is the version to send when a customer is querying their history. An outstanding statement lists only unpaid invoices, which is the version to send every month as a matter of routine, because it is shorter and it is unambiguous about what needs paying.

Statement of account and invoice are not interchangeable

An invoice covers a single transaction and formally requests payment for it. Under UK law you must give a customer an invoice if both you and the customer are registered for VAT, and the recipient records it in their purchase ledger. A statement covers many transactions across a period, carries no such requirement, and is not recorded as a document in the buyer's ledger at all.

The consequence is practical: customers should always pay against invoice numbers, never against a statement total. A lump sum paid against a statement with no allocation creates work on both sides and is a common source of double payments and unrecognized credits. When the payment goes out, the customer should send a remittance advice naming the invoices it covers, which is what makes the reconciliation possible at all.

Where the invoice records sit alongside the jobs and orders that generated them, producing a statement is a lookup rather than a spreadsheet exercise, and a query about one line can be answered from the order it came from. The workflow for preparing and sending a customer account statement sets out the month-end sequence step by step.