What is remittance advice?
For suppliers and customers alike, its always beneficial to have a little more clarity around the invoicing process. As a customer, issuing remittance advice slips can help ensure that your suppliers are always able to match an invoice to a payment. As a supplier, requesting remittance advice can help you optimize your accounts receivable processes. Find out everything you need to know with our comprehensive guide. Deriving from the term remit (meaning to send back), remittance refers to a sum of money that is sent back or transferred to another party. It covers virtually any payment, from bills to invoices, and is typically used with overseas payments  when one party is based in another country. In addition, remittance can also cover personal money transfers made to friends and family. In short, remittance advice is a proof of payment document sent by a customer to a business. Generally, its used when a customer wants to let a business know when an invoice has been paid. In a sense, remittance slips are equivalent to cash register receipts. Theyre particularly helpful when it comes to matching up invoices with payments. Because online payments are becoming increasingly popular, remittance advice slips are sometimes unnecessary. However, after an invoice has been paid, sending a confirmation email is always appreciated. Several key pieces of information need to be included on your remittance advice slip. Most importantly, the slip should identify:  Your name and address  Suppliers name and address  Method of payment  Payment amount  Invoice number  The remittance advice slip should be issued on company headed paper and contain contact details for a member of your organisation who can deal with any queries the supplier may have. No, remittance advice slips are not obligatory. However, they are a courtesy that suppliers are likely to appreciate, as they can be very helpful for recordkeeping and identifying which payments are associated with which accounts. Furthermore, remittance slips dont require much effort to produce, as many businesses will issue a remittance advice note alongside the invoice, making it easier for customers to send across the required information in the correct format. Its important to note that remittance advice comes in several different forms:  Basic remittance advice  Basic note or letter stating the invoice number and the payment amount. Removable invoice advice  An invoice that comes with a removable remittance slip that customers are encouraged to fill in. Scannable remittance advice  Remittance slips that can be scanned for electronic records. If you want to issue a remittance advice slip to your supplier, there are a couple of different options: email and snail mail. Its worth remembering that snail mail is likely to be slower, so for the sake of efficiency, email is probably the best choice. When you send your remittance slip over email, ensure that its going to the appropriate email address (unless youve been told otherwise, this is likely to be accounts receivable). If you send it to a general company inbox, it can get lost in the shuffle. We can help  GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.