The Statement of Account (SOA) is a vital tool for tracking the financial relationship between your water refilling station and your customers. It provides a chronological history of transactions, allowing both you and your customer to see exactly how much is owed at any given time.

To help you manage your accounts effectively, here is a detailed breakdown of the four key financial pillars found in every statement.

1. Opening Balance

The Opening Balance is the starting point of your statement. It represents the total amount of unpaid debt carried over from the past, before the start of your selected date range.

• The Logic: It sums up every single sale made since the customer was registered and subtracts every payment they ever made, stopping exactly one day before the statement's "Start Date."
• Significance: This tells you the "starting debt" for the current period.

2. Total Debits

In accounting for a business owner, a Debit represents an increase in what is owed to you.

• The Logic: This is the sum of all new Sales and Invoices created within the selected date range.
• Significance: Every time you record a sale or dispatch an order that isn't immediately settled, the "Total Debits" will increase, reflecting the new value provided to the customer.

3. Total Credits

A Credit is the opposite of a debit; it represents a reduction in the customer's debt.

• The Logic: This is the sum of all Payments received from the customer within the selected date range.
• Significance: Whether they paid via Cash, GCash, or Bank Transfer, these entries reduce the customer's liability and demonstrate their commitment to settling their account.

4. Closing Balance

The Closing Balance is the most important number on the statement. It is the final amount the customer owes you as of the "End Date" of the report.

• The Formula:
  > Opening Balance (Past Debt)
  > + Total Debits (New Sales)
  > - Total Credits (New Payments)
  > = Closing Balance (Current Owed)

• Significance:

  • Positive Number: The customer has an outstanding balance to pay.
  • Zero (0): The customer is fully cleared of all debt for this period.
  • Negative Number: The customer has overpaid or has an advance credit on their account.

Summary Table