A billing statement is a monthly report or document issued by the credit card companies to credit card holders. The report, sent either by mail or online, usually lists the client and seller’s business addresses, the statement number, date and customer identification number (if any). In the body part of the billing statement, there usually contains all of the service charges within a month, including recent transactions, the monthly minimum payment due, and other vital information such as the date, type, number and the amount of the original invoice, etc..A brief description of the products or services is also provided.
Billing statement can be regarded as an alternative to point-of-sale billing or to a periodic requirement that a customer pay for each item individually. Consumers use their credit cards regularly throughout the billing cycle, which is normally 30 days. When the billing cycle ends, a new statement is issued.
Why do companies use billing statements? Most importantly, it is far more cost effective and efficient for companies to invoice for multiple purchases in one single bill than sending several small bills throughout the course of the month. Usually, a customer with a credit card will make multiple purchases during a set period of time. Billing the customer for each of the purchases individually, therefore, can be rather time consuming and money wasting. By using billing statements, companies can not only determine the length of the billing cycle, but also make record keeping easier as all purchases are listed on one form.
Besides,customers can also benefit from the billing statements since they just need to make a single payment at a time. The-record-keeping benefit of the companies also applies to consumers, who can save their statements and have a record of everything charged during the month. Although the billing statement is most used by credit card companies, any business that charges clients monthly can use it.
If you have a business that charges your clients, you should use the billing statement, for it will act not only as a reminder for unpaid invoices, but also as a vehicle for getting those invoices paid in full.