Accounting
Remittance advice
Remittance advice is a document a payer sends to a supplier to confirm that a payment has been made and to specify which invoices it covers.
What remittance advice is
Remittance advice is a note — paper or electronic — that accompanies or follows a payment, telling the supplier exactly which invoices the payment settles. It’s especially useful when one payment covers several invoices, so the supplier can apply the funds correctly.
It is not a payment itself and not legally required, but it makes reconciliation far easier for the business receiving the money.
What it includes
A typical remittance advice lists the payer, the payment date and method, the total amount paid, and the invoice numbers (and amounts) being settled. With electronic payments, this detail is often sent as a remittance email or attached to an ACH/EFT payment.
For the supplier, matching remittance advice to open invoices is what lets them mark the right invoices paid and keep accounts receivable accurate.
Example: A client pays $4,500 covering three invoices. They send a remittance advice listing invoice #101 ($1,500), #104 ($2,000), and #109 ($1,000) so the supplier knows exactly how to apply the payment.
FAQs
Frequently asked questions
Is remittance advice the same as a receipt?
No. Remittance advice is sent by the payer to say which invoices a payment covers; a receipt is sent by the payee to confirm payment was received.
Is remittance advice required?
No, it’s not legally required, but it’s a helpful courtesy that makes it much easier for the supplier to reconcile a payment against the correct invoices.
Related terms
Invoice payment
An invoice payment is the funds a buyer sends to a seller to settle the amount owed on an invoice, by or before its due date.
Statement of account
A statement of account is a summary document that lists all invoices, payments, and the outstanding balance for a customer over a period of time.
Invoice
An invoice is a document a seller sends to a buyer that itemizes goods or services provided and requests payment by a stated due date.
Put it into practice
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