The balance forward displays the total of the prior amount, for instance, if a client owes money on past due bills or unpaid invoices from a certain time period. To calculate the total amount owed, add this to the customer's current balance. Depending on when the consumer last made a payment, the balance forward may even take non-payment from the previous fiscal year into consideration.
A ledger of bank accounts serves as an illustration. Let's assume that at the end of 2018, you had $25,150.25 in your bank account.
If you look at a 2019 statement with dates from January 1 to December 31, the balance forward is, by definition, the prior amount of $25,150.25 that has been carried over to the current statement.
A single page or document known as a balance forward statement contains a list of all payment activities that occurred during a certain time frame.
The previous balance will be displayed at the top of this statement to demonstrate how the balance moving ahead was determined.
However, as it only refers to a specific time period, keep in mind that this statement may not accurately reflect the amount that a customer owes right now. Because accounts receivable only provides the current balance outstanding, a balance forward statement differs from accounts receivable in this regard.
Giving clients visual cues on their bills is crucial to making sure they understand exactly what you want them to do and where to search for information.
You should make the wording, formats, and design educational because the balance due section of a bill is typically where you want to direct a customer's eyes.
Many invoices have a box at the top of the page that displays the most recent payment's amount, the date it was received, and the balance moving forward in that order.
The amount that the customer must pay will be shown in the main body of the bill together with the payment due dates for the current date range. Giving the consumer a due date and payment arrangements can help them keep their accounts in good standing.
- The better, the more knowledge a customer has. Both of you want customers to pay their bills on time so that your business has a steady flow of revenue, and they both don't want to fall behind on payments.
- A balance forward statement that you provide to your consumers tells them more than simply the total amount owing. The balance forward assists consumers in seeing their current situation by letting them know how much they must pay in overdue invoices in order to bring their accounts current.
- These statements assist clients in avoiding interest payments and maintaining good credit because credit scores impact purchasing power in a variety of spheres of life.
- The consumer is in a better position to stay out of debt and deliver payments to your organization on schedule when they may decide how their money should be allocated.