Understanding Kagami Statements

In Japan, bank transfers are the most commonly used method of payment. Japanese banks charge a fee for each transfer that a business requests. To help customers avoid excessive bank charges, a monthly summarized invoice, or Kagami, is issued as the general billing procedure for Japanese businesses.

Businesses that use monthly summarized invoicing do not issue invoices for every goods delivery. Instead, businesses establish a monthly cutoff date with the customer and issue one invoice that summarizes all of the customer's business transactions for the prior month.

Kagami statements include this information:

• Bill to name and address for the customer.

• Billing period.

  Although billing periods vary by customer, the beginning of the period must be the day after the last cutoff date. The end of the previous period is the cutoff date.

• Open amount as of the cutoff date.

  The open amount is summarized by sales, cash receipts, adjustments, and so on.

• Detailed information, such as invoice number, item number, and price, from each sales order.