what is a remittance advice

Remittance advice is a document or letter sent by a customer to a supplier to inform them that their invoice has been paid. It is often used when a customer wants to let a business know when an invoice has been paid. Remittance advice is not mandatory, but it is seen as a courtesy because it helps the accounts-receivable department to match invoices with payments. The remittance advice should specify the invoice numbers for which payment is tendered. In countries where cheques are still used, most companies invoices are designed so that customers return a portion of the invoice, called a remittance advice, with their payment. The employee who opens the incoming mail should initially compare the amount of cash received with the amount shown on the remittance advice. If the customer does not return a remittance advice, an employee prepares one. Remittance advice can be an electronic notification or a paper-based document. It should contain the payee and payer names, contact details for both the payer and payee, an email address (for emailed remittance advice), invoice date, invoice number, related purchase order number, payment method and currency, and description of the payment. Remittance advice adds an extra layer of clarity and security to the invoicing process for both customers and suppliers.