Today, I’ll teach you one of the most important things about traditional banking. You may have heard the term “statement of account” used in financial transactions at some point. This article will tell you what it is, who needs it, and why. From now on, you can use it to help you with your finance.
What is an account statement?
Let me start by saying that every transaction on your bank account leaves a “trail.” In this case, “trail” means the order in which these transactions are made. The date, time, and type of transaction are written down in the transaction trail. In this case, “mode of transaction” can mean e-channel, ATM, over-the-counter, mobile, or internet transfers.
The transaction will have to look like it fits the goal. There are also transaction references to back up the activities, which can happen in either a checking or savings account. With these transaction references, each transaction can be traced back to a specific person.
To clear things up, a statement of account can exist between a bank and its customer as well as between a small business and its customers. So, let’s answer the question,
“What is a statement of account?”
This is a piece of paper that lists all of the transactions between a bank and its customer or between a small business and its customers over a certain period of time. If a customer or small business wants to keep track of credit or money received from customers, the bank statement will give a clear picture of this information based on the date, time, customer’s name, the amount paid, etc.
On the other hand, a statement of account shows all of the debts that have been taken out of the same account. In short, a small business or customer will need a statement of account to either confirm or balance the financial transactions that happen in the account over time.
Importance of a statement of account.
There is no limit to how much a customer or small business could benefit from a statement of account.
- As a small business, a timely statement of account lets your customers know what goods and services they were charged for.
- An account statement helps a small business make sure that customers have paid. Statements of account are usually sent to customers along with invoices for each purchase.
- Account statements remind customers to pay, and they also help businesses send payment reminders ahead of time.
- When a business’s records don’t match up, the owner can use a summary report of the statement to see if the customer has paid off his debts.
- Transactions that were run twice by accident are being caught on a statement of account
What does an invoice mean?
An invoice is a piece of paper that a business owner or seller gives to a buyer or customer in order to get paid. This includes the price of goods bought or services given. On the invoice, it should say who the seller and client are, what the goods or services are, and how much they cost.
A statement of account gives you real-time information about what happened in your bank account, such as how much money came in and how much went out. It also helps you reconcile any differences that may have happened as a result of your transactions.
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