A statement of account (SOA) is a document issued by a supplier to a buyer summarising, for a stated period, the opening balance, each invoice or debit note with date and amount, each payment or credit note received, and the closing balance due, often with an ageing of overdue items and the interest accrued. It is derived from the ledger and is the standard basis for reconciliation, legal notices, MSME Samadhaan claims and summary suits.
How a statement of account is used in India
The supplier generates the SOA from the ledger, checks each open invoice against delivery proof, adjusts for agreed credit notes and TDS deducted (TDS is a payment to the government on the buyer's behalf and reduces the receivable), and computes interest from each invoice's due date. The SOA is sent to the buyer with a request to confirm or point out differences within a set period. If the buyer confirms, limitation restarts; if it is silent, the notice follows with the SOA attached. Before a Facilitation Council or court the SOA becomes the claim schedule.
| Column | Why it matters |
|---|---|
| Invoice no. and date | Links to GST return and e-way bill |
| Due date | Starts interest under MSMED Act or contract |
| Amount and balance | Net of credits and TDS |
| Days overdue | Ageing for 43B(h), MSME-1 and interest |
| Interest to date | Computed at the applicable rate |
Why it matters for getting paid
Buyers delay by disputing figures. A reconciled SOA that already accounts for every credit note and TDS entry leaves nothing to dispute except the fact of non-payment. It also makes the interest claim concrete. Prepare it before the legal notice, and seek a ledger confirmation on it. The ageing report is the SOA's portfolio-level cousin.
How FundRaksha uses it
Every FundRaksha notice carries a reconciled statement of account prepared by the advocate's team from the client's ledger, GST data and bank statements, with interest computed to the notice date. Buyers rarely find errors, which speeds settlement; about 60% of cases settle before court. Fee: 30% on recovery, nothing upfront.
Worked example (hypothetical)
A Hyderabad pharma packaging unit (small enterprise) prepares an SOA for a buyer: four invoices totalling ₹9,00,000, dated 1 March to 1 June, each with 30-day written terms; a credit note of ₹40,000 for returned cartons; TDS of ₹18,000 deducted and deposited by the buyer; payments received ₹2,00,000. Balance: ₹9,00,000 − ₹40,000 − ₹18,000 − ₹2,00,000 = ₹6,42,000. Interest under Section 16 is computed on each invoice's net amount from its due date to the SOA date; assuming a 6.5% bank rate (19.5% a year, monthly rests) and delays of 3 to 6 months, the total is about ₹47,000. The notice demands ₹6,89,000.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.