Published: October 2025
Statements of account are one of those financial documents that many Australian business owners understand vaguely but don't use strategically. Perhaps you've received them from suppliers, or maybe you send them occasionally when chasing overdue payments. But do you really understand what makes them valuable?
For businesses that sell on credit or have ongoing relationships with customers, statements of account are essential tools for managing cash flow, reducing late payments, and maintaining accurate financial records. This guide explains everything Australian businesses need to know about statements of account and why they matter more than you might think.
A statement of account is a financial document that summarises all transactions between your business and a specific customer over a defined period. Unlike an invoice which relates to a single transaction, a statement shows the complete picture of the customer's activity with you.
Think of it as a customer's financial report card with your business. It shows what they've purchased, what they've paid, any credits or adjustments, and most importantly, what they still owe.
Statements typically cover monthly or quarterly periods, though businesses can choose whatever frequency works for their operations. Many Australian businesses send monthly statements to customers with ongoing credit arrangements.
The key components of a statement include:
This complete transaction history helps both you and your customer understand the financial relationship clearly.
Many business owners confuse statements with invoices, but they serve completely different purposes.
An invoice is a demand for payment for a specific transaction. When you sell goods or provide services, you issue an invoice requesting payment by a certain date. Each invoice stands alone and relates to one transaction or project.
A statement of account doesn't request payment. Instead, it reminds the customer of their overall position by summarising multiple transactions. It says "here's everything that's happened between us this month, and here's where we stand."
Consider a business relationship where you invoice a customer multiple times per month:
At month end, your statement shows all these transactions in sequence, revealing that while they paid the first invoice, two invoices totalling $3,150 remain outstanding.
Without the statement, the customer might lose track of the second and third invoices among other business correspondence. The statement brings everything together in one place.
In Australia, statements of account cannot be used as tax invoices for GST purposes. Customers cannot claim GST credits based on a statement alone. They need the actual tax invoices for their records and GST claims.
This means even when sending statements, you must ensure customers have proper tax invoices for every transaction.
Australian businesses face specific legal obligations regarding statements of account.
Under Australian consumer law, if a customer requests an itemised statement of account, you must provide it within seven days. This applies to all businesses selling goods or services on credit terms.
Failing to provide a statement when requested can result in complaints to consumer affairs authorities and potential penalties. More practically, it damages customer relationships and creates suspicion about your record-keeping.
While you must provide statements when requested, there's no law requiring regular statements to be sent proactively. Many businesses choose to send monthly or quarterly statements as good practice, but it's not legally mandated.
However, if your terms of trade specify that statements will be provided regularly, you create a contractual obligation to do so. Review your credit terms and customer agreements to ensure you comply with any commitments you've made.
Well-executed statements of account deliver several important benefits for Australian businesses.
Statements significantly reduce late payments by keeping customers informed of what they owe. Customers juggle multiple suppliers and can genuinely forget about outstanding invoices. A monthly statement acts as a polite reminder without the confrontational tone of a collections call.
Businesses that send regular statements report fewer disputes about outstanding balances because both parties maintain a shared understanding of the account status throughout the relationship.
Statements help identify mistakes before they become major problems. When you summarise all transactions, both you and your customer can spot:
Catching these errors early prevents disputes and maintains trust. It's much easier to correct a recording mistake discovered days after it occurs than months later when memories have faded.
Regular, clear statements demonstrate organised financial management. Customers appreciate businesses that make it easy to understand the financial relationship. This professionalism builds confidence and makes customers more likely to continue the relationship.
In contrast, businesses that can't provide clear account histories when asked appear disorganised and create doubt about their record-keeping accuracy.
Statements create a clear audit trail showing the customer relationship over time. If disputes arise or if you need to demonstrate your attempts to collect payment, statements provide evidence of regular communication and clear notification of outstanding amounts.
For tax purposes and compliance, having a complete record of customer statements makes audits smoother and helps substantiate your revenue recognition and debt write-off decisions.
When payment problems arise, having sent regular statements strengthens your legal position. You can demonstrate that the customer was regularly informed of their obligations and had ample opportunity to query any discrepancies or arrange payment.
This documentation becomes particularly important if you need to pursue legal action for non-payment or engage debt collection services.
Creating effective statements requires including the right information in a clear format.
Business details:
Customer details:
Statement information:
Transaction details:
Summary section:
Payment terms reminder:Include a note about your standard payment terms to reinforce expectations.
Payment methods:List how customers can pay (bank transfer, credit card, etc.) with relevant details.
Contact for queries:Provide a name and direct contact information for account queries.
Overdue notification:If amounts are overdue, a polite note drawing attention to this fact can prompt action.
Timing matters when it comes to statement effectiveness.
Most Australian businesses send statements monthly, typically within the first week of the new month covering the previous month's activity. This creates a predictable rhythm that customers come to expect.
Some businesses with high transaction volumes or strict payment terms send statements more frequently, even weekly. Others with less frequent transactions might send quarterly statements.
Whatever schedule you choose, consistency matters. Customers should know when to expect statements, making them more likely to review them promptly.
Always provide statements within seven days when customers request them, regardless of your regular schedule. Customers might need statements for their own audits, tax purposes, or simply to reconcile their records.
Make it easy for customers to request statements by providing clear contact information and responding promptly to requests.
When payments become significantly overdue, send a statement before escalating to formal collections processes. This gives the customer one final opportunity to review their position and respond before you take stronger action.
If a customer disputes what they owe, immediately provide a statement showing the full transaction history. This often resolves disputes quickly by clarifying exactly what's outstanding.
Business owners should watch for warning signs when reviewing customer statements that might indicate payment problems.
If a customer's overdue balance keeps growing older (shifting from 30 days to 60 days to 90+ days), they're not keeping up with payments even though they continue ordering. This pattern often leads to bad debts.
Customers who consistently pay less than what's actually due might be experiencing cash flow problems. While partial payment is better than nothing, the pattern suggests they're unable to meet their obligations fully.
The most concerning pattern is when a customer stops paying but continues placing new orders. This suggests they're using your credit as an interest-free loan with no intention of catching up.
Excessive credit notes might indicate quality problems, disputes about pricing, or potential fraud where customers claim false issues to reduce their payments.
Identifying these patterns early allows you to address problems before bad debts accumulate.
Modern accounting software makes creating and sending statements efficient and consistent.
Xero, MYOB, and QuickBooks all include statement generation features that pull transaction data automatically and format professional statements. These systems:
Most software allows customising statement templates to include your branding, preferred layout, and specific messages. This ensures consistency while maintaining your professional image.
Automated email delivery saves postage costs and ensures statements reach customers quickly. You can track whether emails were opened, allowing follow-up on customers who haven't reviewed their statements.
When your accounting system handles statements, the data is always current and consistent with your financial reports. This eliminates manual preparation errors and ensures statements reflect your actual records.
Following these practices improves statement effectiveness:
Even with automation, review statements before sending to catch any obvious errors or unusual transactions that might need explanation.
Make it easy for customers to ask questions by providing direct contact details on each statement. Prompt responses to queries maintain good relationships.
Don't just send statements and hope for payment. Review the aging analysis and follow up personally on significantly overdue accounts.
Maintain copies of all statements sent, whether digital or paper. These become important records if disputes or legal action arise later.
Ensure customers receive both proper tax invoices for individual transactions and periodic statements summarising their account. Both documents serve important but different purposes.
If multiple people interact with customers about accounts, ensure everyone understands the difference between invoices and statements and can answer customer queries about either document.
Take control of your accounts receivable with professional support
Scale Suite provides comprehensive accounts receivable management for Australian businesses, ensuring your customers stay informed and your cash flow remains healthy.
Our Sydney-based team handles:
We work within your existing systems (Xero, MYOB, or QuickBooks) to maintain accurate customer records and ensure statements are timely, accurate, and professional.
As part of our comprehensive bookkeeping services, we don't just send statements but actively manage your accounts receivable to improve cash collection and reduce payment delays.
Our registered BAS agents and experienced finance professionals understand Australian business practices and maintain the documentation standards necessary for compliance and collections.
Book a free consultation to discuss how ScaleSuite can improve your accounts receivable management and cash flow.
How often should I send statements of account to customers?
Most Australian businesses send statements monthly, typically in the first week of each new month covering the previous month's transactions. However, frequency depends on your business model. High-volume businesses might send weekly statements, while those with infrequent transactions might send quarterly. Choose a frequency that keeps customers informed without overwhelming them with paperwork.
Can I charge customers for providing statements of account?
While you can charge for statements if your credit terms specify this, it's generally poor practice in Australia. Most businesses consider statements a normal part of accounts receivable management and include the cost in their pricing. Charging for statements can damage customer relationships and discourage customers from requesting the information they need to pay you correctly.
What's the difference between a statement of account and an invoice?
An invoice relates to a single transaction and is a demand for payment by a specific date. A statement summarises multiple invoices, payments, and other transactions over a period, showing the overall account position. Customers need invoices to claim GST credits. Statements can't be used for GST purposes but help customers track their overall obligation to you.
Do I need to send statements if all my customers pay immediately?
If your business model involves payment before delivery or immediate payment upon invoicing, statements add little value. However, if any customers have credit terms or if payments occasionally arrive late or get missed, statements become useful tools for maintaining clear communication about account status.
Can statements of account be sent via email?
Yes, email delivery is perfectly acceptable in Australia and is increasingly the standard method. Email is faster than post, creates a delivery record, and is more cost-effective. Most accounting software can email statements automatically. However, some customers may prefer paper statements, so accommodate their preferences when requested.
What should I do if a customer disputes their statement?
Respond promptly to disputes by reviewing your records carefully. Provide copies of all relevant invoices, receipts, and correspondence supporting your position. If an error exists in your records, acknowledge it immediately and issue a corrected statement. If your records are correct, patiently explain the transactions and provide whatever documentation helps the customer understand. Most disputes arise from recordkeeping differences and can be resolved quickly with clear communication.
How long should I keep copies of statements?
Treat statements like other business records and retain them for at least five years from the end of the financial year they relate to. This meets ATO requirements and ensures you have documentation available if disputes arise or audits occur. Digital storage makes long-term retention simple and cost-effective.
Are statements legally binding documents?
Statements summarise transactions that are already documented in invoices and agreements. While not contracts themselves, they serve as evidence of the account relationship and can support legal action for debt collection. Courts view regular statements showing amounts owing as evidence that customers were aware of their obligations.
Scale Suite delivers embedded finance and human resource services for ambitious Australian businesses.Our Sydney-based team integrates with your daily operations through a shared platform, working like part of your internal staff but with senior-level expertise. From complete bookkeeping to strategic CFO insights, we deliver better outcomes than a single hire - without the recruitment risk, training time, or full-time salary commitment.
Considering hiring finance staff? Let's compare what you'd get with an internal hire versus our embedded team approach.
Our experts will show you the complete picture - costs, capabilities, and flexibility - so you can make the right decision for your business.
No lock-in contracts and 30 day money back guarantee.
