← Lessons 06-Commercial Conduct
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1. INTRODUCTION 2. DOCUMENTS USED IN COMMERCIAL TRANSACTIONS 3. CREDIT AND DEBIT NOTES 4. METHODS OF PAYMENT 5. STATEMENT OF ACCOUNT 6. MAJOR TYPES OF FINANCIAL INSTITUTIONS 7. MAJOR SERVICES PROVIDED BY HIGH STREET BANKS 8. GOOD COMMERCIAL PRACTICE – KEY TAKEAWAYS 9. QUICK EXAM NUMBERS & FACTS – MEMORISE THESE 10. FINAL MEMORY CHECKLIST

5. STATEMENT OF ACCOUNT

  • A statement of account summarises transactions over a period and shows the amount currently owed by the customer.
  • Historically, statements were routinely sent monthly; the training material notes that many businesses now simply pay suppliers on receipt of invoices.
  • A conventional statement can show:
  • Opening amount owed
  • Payments received during the period
  • Invoices for further work completed during the period
  • Closing amount owed
  • ‘DR’ on a statement means the customer owes money to the operator.
  • Example from the training material: opening balance £5,500 DR, invoices £900 and £1,000, cheque received £3,400, giving a closing balance of £4,000 DR.
  • Prompt payment is important for maintaining healthy cash flow.
  • A business may encourage prompt payment by offering a small cash discount, for example 2½% for immediate settlement.