What is a Billing Statement?

A billing statement is a listing of the transactions impacting an account during a specific period of time. Statements are typically sent to customers on a monthly basis, so that they can review and verify account activity. The format of a statement that relates to unpaid customer receivables usually contains a reminder to pay any unpaid amounts that have exceeded the payment terms assigned to a customer.

Advantages of a Billing Statement

A billing statement is a relatively innocuous collection technique, since recipients do not consider it to be overly intrusive. As long as it is received by a payables clerk who is interested in reviewing it, a billing statement may result in some overdue invoices being paid.

Disadvantages of a Billing Statement

When billing statements are mailed, the seller incurs the cost of printing and postage. This may not represent much of a cost-benefit tradeoff if customers are not diligent in reviewing the statements.

The Difference Between a Billing Statement and an Invoice

A billing statement lists every transaction impacting a customer account during a period of time, while an invoice contains a request for payment in regard to a specific sale that was allowed by the seller on credit. The differences between the two documents are as follows:

Contents. A billing statement may contain a list of several invoices that were issued to the customer, while an invoice contains fewer items. In essence, an invoice is a subset of a billings statement.
Timing. An invoice may be issued at any time (usually right after a sale transaction has been completed), while a billing statement is usually issued at the end of the month.