What Is Remittance Advice and Why Do Clients Send It?

What Is Remittance Advice?

Remittance advice is a document (or email) sent by a buyer to a seller confirming that a payment has been made. It specifies which invoices the payment covers and the amount paid against each.

Think of it as the payment notification that travels alongside — or just after — a bank transfer.

Why It Exists

Businesses that deal with many suppliers and many invoices at once often pay multiple invoices in a single bank transfer. For example, a payment of $8,450 might cover:

Invoice INV-A-2025-004: $3,200

Invoice INV-A-2025-007: $2,750

Invoice INV-A-2025-009: $2,500

Total: $8,450

Without remittance advice, the seller receives a bank deposit of $8,450 with no context. Which invoices were paid? Was there a deduction? Was one invoice deliberately excluded?

Remittance advice answers all of those questions. It tells the seller exactly how to allocate the payment across their outstanding receivables.

What Does Remittance Advice Look Like?

It typically arrives as:

An email from the client's accounts payable department

A PDF attachment to that email

Occasionally a letter (for traditional businesses)

It usually contains:

The client's name and details

The date of payment

The bank reference or payment confirmation number

A list of invoices included in the payment (invoice number, original amount, amount paid)

Any credits or deductions applied

Total amount paid

What to Do When You Receive Remittance Advice

Match it to the bank deposit. Find the corresponding deposit on your bank statement. Confirm the amount matches.

Mark the invoices as paid. Update each listed invoice in your accounting system with the payment date and amount received.

Check for discrepancies. If the payment is less than the full invoice total, the remittance advice should explain why (e.g. a credit note was applied, a partial payment was made, a deduction for returned goods).

Query unexplained deductions. If the payment is less than invoiced with no explanation, contact the client to clarify before writing off the difference.

File the remittance advice. Keep it with your payment records — it's your confirmation that the client acknowledges which invoices were paid.

What If a Client Doesn't Send Remittance Advice?

Most small and individual clients won't send remittance advice — they'll just pay and perhaps send a brief "payment made" message.

For lump-sum payments that cover multiple invoices, don't hesitate to ask: "I've received a payment of $8,450 — could you confirm which invoices this covers so I can update our records?"

For recurring payments from consistent clients, you'll typically recognise the amount and know which period it relates to.

Sending Remittance Advice as a Buyer

When you pay a supplier, sending remittance advice is a professional courtesy — especially for lump payments covering multiple invoices. A brief email noting what was paid and against which invoice numbers:

Speeds up the supplier's reconciliation

Reduces queries to your accounts payable team

Builds goodwill in the supplier relationship

It takes 2 minutes and prevents 20 minutes of follow-up emails.