A Billing Statement is a monthly report and bill of a credit card holder’s account activity for the past month and the monthly minimum payment due.
The statement is generated on the first week of every month for all credit card holders marking the end of a billing cycle.
Billing is essential in every transaction where payments with a deadline have to be made. Therefore, the credit card company has to issue a statement of billing. Credit card companies use these statements to provide their customers with a monthly breakdown of their expenditures and demand the minimum monthly amount they are required to pay to make sure their credit card remains valid. A statement of billing is an important document for tracking the credit card usage of each credit cardholder.
Credit card companies also use the document to identify cardholders who are behind on their monthly payments. This way, they are able to impose the necessary penalties and late fees. These statements can be paper-based or electronic depending on the situation and efficiency of the method in relaying information to customers.
The basic information that should be input includes a summary of the account transactions, interest fees, total amount owed, the minimum payment required and associated due date, and the account’s closing balance. The statement of billing should be accurate to match the exact expenditure of the customers.
Billing Statement Templates
We have provided free templates that you can download from our site at no charge whatsoever. These templates are designed to suit different situations and can be customized to fit the company brand.
What Should be Included?
A billing statement is segmented into different sections or categories to accommodate all the necessary information. Specifics of each statement will be different and unique to the cardholder’s activity for the specified duration. However, this information will usually be captured in several basic components.
These elements include:
Previous balance
The previous balance on the credit card or account should be indicated in the statement. This value is typically the previous month’s closing balance. It should be indicated with the exact figure and appropriate currency.
Payments and credits
The statement of billing should have a section to list all the transactions completed by the cardholder for the month for which they are being billed. This section will typically be the largest in a statement. The transactions are given in categories. At the beginning of each category, a summary of the applicable interest rates is given. Each category should be described using the transaction date, merchant name, and transaction amount.
Total amount of new purchases
The exact total amount of all the transactions made by the credit holder should also be indicated. The amount should be given in figures and must show the appropriate currency used.
Balance transfers
A balance transfer is made when a credit card holder conveys a credit card balance to a new card issued by a different company that has lower or no interest for a given period. Balance transfers are made so as to save on interest as the credit card holders pay off the debt. The billing statement should provide a section to indicate the amount transferred.
Cash advances
A cash advance is a short-term loan issued to credit holders by the credit card company, and the cardholders can withdraw cash that amounts to the loan limit through an ATM or bank. The statement should state the total amount withdrawn by the cardholder during the specified period. Cash advances are known for their high-interest rates and fees but are convenient to cardholders are they are quick to obtain.
Fees charged
The statement should also indicate the applicable fees, such as withdrawal fees and transaction fees. The exact fee should be stated, and the appropriate monetary unit provided. Any late payment fees should also be included in this section.
Interest charged
The document is required to state the interest charged on the outstanding balance and cash advances. The percentage interest should be declared and the total interest amount charged.
New total balance
A statement of billing has to declare the total amount the cardholders owe to the credit card company. The total balance is inclusive of all transaction expenses, outstanding balance, applicable fees, and interest. The exact amount should be indicated in figures and words and must be given in the appropriate currency.
Minimum payment due and the due date
Monthly minimum payments are determined by estimating how long the cardholder would take to pay other the total balance based on their earnings. The duration can be three years or as per the company policy. The exact minimum payment the cardholder is required for that month should be indicated. The associated due date should also be stated.
Cardholder’s account information
A statement of billing should be customized to suit the associated cardholder, which means it must contain their account details. The information provided under this section includes the card holder’s credit limit, the amount used and remaining, and available cash advance.
Benefits section
It is customary for some credit card companies to reward their customers based on the activity of their accounts and the amount transacted. Therefore, a statement of billing should have a section to indicate a card holder’s points towards earning the benefits or rewards.
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How to Craft a Billing Statement in MS Word
Companies can create their own personalized statement template that best reflects their brand. This can be done using MS Word, which is readily available and easy to use.
Below are several steps to use when creating these billing templates:
- Open MS word and create a file.
- The template for making a billing statement should be created in A4. Therefore, if the page is not automatically set in A4, go to the “Layout” command and select the “Size” option, scroll down to “More paper sizes.” A dialogue box will pop up, go to “paper,” and set the page to A4.
- In the dialogue box, adjust margins – set them to 0.5 for all sides: top, bottom, right, and left.
- The next step is to “Insert “a table of 2 (columns) by 2 (rows). Then, merge the two columns in the first or top row. Label the row as “Statement” and align the text to the left.
- Next, label the first column, 2nd row as “Company slogan,” and label the 2nd column as “Date.” Select text and align to the left.
- Add another 3 by 1 table. In the 1st column, input details about the company such as company name, address, phone, email, and fax (each on its own line). The next column of that table should record details about the cardholder such as name, physical address, phone number, fax, and email. Next, label the last column as “Comments.”
- Afterward, add another table 4 by 8 rows or any other number that befits the template. Label the columns as date, description, balance, and amount. Adjust the size of columns so as to capture information adequately; for example, the description column should be longer to capture more details. The rows are meant to record the transactions.
- More rows can be added to accommodate more transactions and breakdown of interest and fees at this stage of creating the template.
- After adding enough rows, break the 2nd, last and last row into 6 columns, and name it “current” to indicate the card holder’s payment dates that are past due. The first 5 categories indicate the following due dates; 1-30 days, 31-60 days, 61-90 days, and over 90 days. The last column of that row should then capture the applicable amount payable by the cardholders.
- Next, add a 2 by 4 table. Make the table smaller but outstanding; Name the rows of this table as remittance, statement number, date, the amount due, and the amount enclosed.
- Once the design is complete and contains all the needed details, editing should be done on the entire design. The following are techniques that can be used to improve the quality of the billing statement; bold title, date, description, balance, amount, and “current” row. Increase the font of the title “Statement” such that it is visible from a distance.
- Then, select the first two tables, go to “Design”, then “Borders”, and scroll to “no borders” to remove borders.
- Lastly, edit the statement of billing to align with the company brand. Modify colors of different rows, use different fonts, etc.
Billing Statement Vs. an Invoice
Sometimes billing statements are mistaken for the invoice, especially for transactions based on credit. While both documents can be taken as bills to the customer, they are entirely two different types of documents that serve distinct purposes. A seller issues an invoice to their customers to request payment of money owed after offering services or products.
On the other hand, this statement of billing is issued by sellers specifically as a report of their account activity (billings to and payments from) for a specified period. It is a request for the monthly minimum payment or ending balance payment.
The differences between a billing statement and an invoice are as follows:
| Billing Statement | Invoice |
| It is specifically issued by sellers who offer their services and goods on credit | Invoices can be issued by any party demanding payment for services or goods delivered |
| A statement serves as a general notification or report on a customer’s account ending balance or non-payment | Invoices are requests for payment |
| Billing statements will be centered on the total non-payment that is due as a result of sales on credit specifically. It can therefore capture details about several transactions | An invoice focuses on one transaction or sale. Every detail is related to that specific transaction |
| These statements are issued at intervals, typically at the end of the month | Invoices are only issued after a transaction or sale |
| It is a communication document and is not recorded in the seller’s account as the accounts payable are already recorded using invoices for each specific transaction between the customer and the seller | Invoices are accounting documents are recorded as “payable” by the buyer |
Final Thoughts
Billing statements effectively summarize activity on a credit card holder’s account for a specific period. The document lists all the transactions and any payments, such as cash advances taken by the cardholder, and indicates the minimum monthly payment they are required to pay as a result of the account activity.
Billing statements can be created using templates, and companies can make personalized templates using MS Word. The basic components of a billing statement template are title, credit card issuer details, card holder’s information, an itemized list of all transactions, applicable fees and interests, ending balance, minimum monthly payment, and the applicable due dates.
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