Credit card statement
The monthly summary a card issuer sends showing every charge, payment, fee and the balance due for one billing cycle.
In short
- It lists every charge, payment, fee and interest charge for one billing cycle, with the balance and due date.
- It proves a payment was made, but the IRS and CRA still expect the receipt or invoice behind each business charge.
- Keep statements as long as the tax records they support: three years in most US cases, six years in Canada.
A credit card statement is the summary a card issuer sends at the end of each billing cycle. It lists every purchase, refund, payment, fee and interest charge posted during the cycle, and tells the cardholder how much is owed and by when.
What's on a credit card statement
- Billing cycle: the opening and closing dates the statement covers.
- Statement balance: what was owed when the cycle closed. Paying it in full by the due date usually avoids interest on purchases.
- Minimum payment and due date. In the US, Regulation Z requires issuers to have procedures so the statement is delivered at least 21 days before the payment is due.
- Transactions: date, merchant name as it appears on the card network, and amount for each charge and credit.
- Interest and fees, with the rates that apply.
- Credit limit and available credit.
Statement balance vs current balance
The statement balance is fixed when the cycle closes. The current balance keeps moving as new charges and payments post. A credit on the statement, shown as a negative amount or marked CR, means the issuer owes the cardholder money, usually after a refund or an overpayment.
A statement is not a receipt
For a business, the statement proves a payment was made: the IRS accepts a card statement showing the amount, the payee and the date as proof of payment. It adds that proof of payment alone doesn't show the business is entitled to the deduction, and asks for the sales slips and invoices too. In Canada, an input tax credit on a purchase of $100 or more needs the supplier's GST/HST registration number, which a card statement doesn't carry. The receipt is still needed for every charge.
How long to keep credit card statements
For tax purposes, keep them as long as the return they support can be reviewed. The IRS general rule is three years after filing, longer in some cases. The CRA asks businesses to keep records for six years from the end of the last tax year they relate to.
Reconciling the statement
At month end, each line on the business card statement is matched to its receipt and coded. Smartbills matches receipts from photos, email and stores that use Smartbills to the card transactions as they post, leaving a short list of charges still missing a receipt when the statement arrives.
Worked example
Forty-one lines at month end
An office manager's card statement shows 41 charges for September. Thirty-six already have a receipt matched from the inbox or a photo. Of the other five, two are subscriptions billed in US dollars, one is a parking meter and two are restaurant meals. Chasing five receipts takes ten minutes; chasing 41 takes an afternoon.