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Key takeaways
- A remittance advice is sent by the payer to say what was paid, when, how and against which invoices.
- Suppliers use it to apply cash to open invoices. Without it they guess, and mistakes lead to chasing letters.
- Send it the day you pay, include your payment reference and list invoice numbers, not just a total.
- It is not a receipt. The receipt comes from the supplier, and the remittance advice comes from you.
Free PDF and Excel: Remittance advice template and email wording. Get it below
What a remittance advice does
A remittance advice is a notice from a buyer to a supplier that a payment has been made, listing the invoices it settles, the amounts, the payment date and the method.
A bank transfer arrives as one line on the supplier's statement: an amount, a date and a short reference. If you paid six invoices in one transfer, that line says nothing about which six. The remittance advice supplies the missing key.
A buyer pays a freight company 8,420.00 in a single transfer covering three invoices. The freight company's receivables clerk sees an unnamed deposit of 8,420.00 and finds no invoice for that amount. She emails the buyer on day three, and the buyer's account is flagged for a hold.
Had the buyer sent a remittance advice listing the three invoices with amounts and the bank reference, the cash would have been applied the same morning.
What to put on it
| Field | What goes in it | Why it matters |
|---|---|---|
| Payer and payee | Your company name, the supplier name and any supplier account number. | Lets cash be applied to the right account. |
| Payment date and method | Transfer, cheque or card, and the value date. | Helps trace a delayed transfer. |
| Payment reference | The bank reference or cheque number. | The supplier matches it to the bank line. |
| Invoice numbers and dates | One line per invoice paid. | Without it the supplier guesses. |
| Amount per invoice | The amount applied to each. | Shows partial payments clearly. |
| Deductions | Credit notes, tax withheld, discounts taken. | Explains why the total is smaller than the invoices. |
| Total paid and currency | The total transferred and its currency. | Must equal the bank line. |
| Contact | Who in your finance team to call with a query. | Short route to resolve a mismatch. |
Free PDF and Excel
Remittance advice template and email wording
A one-page remittance advice, ready-to-use email wording and a checklist for your accounts payable team.
- Remittance advice layout
- Plain-text email wording
- Pre-send checklist
- Excel version that totals the invoices paid
Plain-text email you can adapt
Subject: Payment advice, [your company], [payment date]. Body: We have paid [total] on [date] by bank transfer, reference [ref]. This settles invoice [no.] for [amount], invoice [no.] for [amount] and credit note [no.] for minus [amount]. Please apply and confirm. Questions to [name, email, phone].
Remittance advice, receipt and proof of payment
The payer sends the remittance advice. The payee sends a payment receipt once it has the cash. A bank confirmation or screenshot is proof of payment. They answer three different questions.
Mistakes that cause misapplied cash
- Paying a total with no invoice list.
- Changing the amount without saying why. A short payment with no note looks like an underpayment.
- Using a payment reference the supplier cannot see on their bank feed.
- Sending the advice days after the payment.
- Sending it to a general mailbox nobody reads.
- All invoice numbers are listed with amounts.
- Credit notes and deductions are shown.
- Total equals the bank amount.
- Bank or cheque reference is included.
- Sent the day you paid.
- Addressed to the supplier's collections contact.
Frequently asked questions
Who sends a remittance advice?
The payer, to the payee, normally by email from accounts payable once a payment run completes.
Is a remittance advice a legal requirement?
Rarely. It is good practice. Some large buyers send it automatically, and some suppliers require it before applying cash.
What is the difference between remittance advice and an invoice?
The invoice asks for payment. The remittance advice reports that payment has been made.
Can a remittance advice be sent by email?
Yes, and email or an electronic file is now the norm. Some banks also send payment details through the payment file itself.
What if a supplier cannot match my payment?
Send the advice again with invoice numbers, the bank reference and the date, and ask them to confirm application.