What is a remittance advice?
A remittance advice is a note a customer sends to a supplier to say they have paid, or are about to pay, and which invoices the payment covers. It is also called a remittance slip, a remittance note or a payment advice.
It can be an email, a PDF from the customer's accounting system, or a paper slip sent with a check. Sending one is a courtesy, not a legal requirement.
What to do on the supplier's side when one arrives is covered in what to do when a customer sends a remittance advice.
What does a remittance advice include?
A remittance advice lists the invoices being paid, the amount against each, the payment date and the payment method. It may also show credit notes or deductions the customer has taken, and purchase order numbers.
Those details let the supplier match one payment to several invoices. That matching step is part of the cash application process.
Is a remittance advice proof of payment?
No. A remittance advice shows that a payment was sent or scheduled, not that the money has reached the supplier's bank. The supplier's bank statement is the proof.
A payment run can be dated days after the remittance is sent, so suppliers usually hold reminders on the named invoices until the payment date, then check the bank. If less money arrives than the invoices add up to, the difference is a short payment.
Frequently asked questions
Who sends a remittance advice?
The customer, or payer, sends it to the supplier. The supplier may send a receipt back once the money arrives.
What is the difference between a remittance advice and a receipt?
A remittance advice comes from the payer and says a payment was sent. A receipt comes from the supplier and confirms the money was received.
App of the Year