What is a Remittance Advice?

Learn all about remittance advices, why they are issued, what they look like and what they mean when it comes to accounting.

What is a Remittance Advice?

A remittance advice (also known as a payment advice) is defined as a document issued by a customer when they pay a sales invoice which normally includes the following helpful information:

  • Customers name and address
  • The recipients names and address
  • Date of payment
  • Invoices numbers they are paying
  • The total amount being paid

Here is an example remittance advice:

Example Remittance Advice (source: Computer Insights Inc)

Is a Remittance Advice Proof of Payment?

While a remittance is a proof of payment it has no legal status, it is just a document sent to notify a supplier that they have remitted payment.

Remittances are normally sent by email from one accounts team to another to provide information about which invoices they are paying so they can be easily matched in the accounting system. For this reason and the information they hold, remittances are normally considered part of the source records in accounting.