What is a statement of account?

Definition of Account Statement and Examples

An account statement is a document issued by a company to the client, outlining financial transactions between the company and the client over a specified period. It is also referred to as a “statement of account,” and is usually issued monthly, reflecting a zero balance if there are no outstanding payments.

How Does an Account Statement Work?

An account statement serves as a useful tool for sellers to remind customers of outstanding payments. This is important because timely payments from customers can improve the seller’s liquidity and allow the company to spend money on resources needed to maintain business operations.

Account statements are also significant for customers as they enable them to accurately track their payments and spending. Payment reminders, aided by the account statement, can help them save money by settling dues promptly and avoiding any late fees.

An account statement contains various elements, including:

• Seller’s name and contact details
• Customer’s name and contact details
• Statement date
• Customer account number
• Previous balance (carried over from the last statement)
• All transactions (invoices and payments, each on a separate line)

Types of Account Statements

In addition to business-related scenarios, account statements can include credit card statements, insurance account statements, and bank account statements.

Credit Card Statements

Credit card statements list all transactions made by cardholders, including point-of-sale purchases, with these transactions reflecting when they occur. When a credit card holder pays off their credit card debt, the funds are reflected in the account.

At the end of the period, the card issuer sends a credit card statement to the cardholder that displays all transactions, fees incurred, and the balance.

Healthcare Account Statements

If you have an outstanding balance with the hospital billing department, you can expect to receive monthly statements showing the amount due, the payments you have made, the payments that are due, and, in some cases, pending insurance claims.

You should retain monthly account statements for at least one year and tax-related documents for at least seven years. They can provide a record of tax-related transactions and serve as proof of income from interest-bearing accounts.

Source: https://www.thebalancemoney.com/what-is-a-statement-of-account-5207404