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Monthly Statements; Monthly Customer Statements
A monthly statement is a summary of all outstanding invoices generated by a creditor and sent to its customers. For some customers, a monthly statement serves as a friendly reminder relating to past due invoices. There is a risk associated with sending monthly customer statements. It involves the fact that some customers will ignore the due dates listed on invoices and instead will pay based receipt of the monthly statement from the creditor.
Credit professionals must strongly discourage this practice in order to protect their company's cash flow. If a customer insists on paying only against statements rather than based on the invoice due date, the creditor can help beat the clock by generating statements weekly rather than monthly. Ideally, the weekly statement generation process can be automated, but even if statements must be printed manually it is usually a better choice than allowing customers to pay invoices based on the statement date. Always include this key information on your monthly statements:
- Your remittance address,
- Your telephone number,
- An invitation for the customer to call to report problems or request supporting documentation,
- A reiteration of your terms of sale.
Edited by Michael C. Dennis. Mr. Dennis is the author of several books relating to credit risk management. He can be reached by email at mcdennis13@yahoo.com