Remittance advice is a letter sent by a customer to a supplier to inform the supplier that their

invoice An invoice, bill or tab is a commerce, commercial document issued by a sales, seller to a buyer relating to a sale transaction and indicating the product (business), products, quantities, and agreed-upon prices for products or Service (economic ...

has been paid. If the customer is paying by

cheque A cheque, or check (American English; see spelling differences) is a document that orders a bank (or credit union) to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The pers ...

, the remittance advice often accompanies the cheque. The advice may consist of a literal letter (e.g., "To Whom it May Concern: Your shipment of the 10th inst was received in good order; accompanying is our remittance of $52.47 per invoice No 83046") or of a

voucher A voucher is a bond of the redeemable transaction type which is worth a certain monetary value and which may be spent only for specific reasons or on specific goods. Examples include housing, travel, and food vouchers. The term voucher is also a ...

attached to the side or top of the cheque. Remittance advices are not mandatory, however they are seen as a courtesy because they help the accounts-receivable department to match invoices with payments. The remittance advice should therefore 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. In countries where

wire transfer Wire transfer, bank transfer, or credit transfer, is a method of electronic funds transfer from one person or entity to another. A wire transfer can be made from one bank account to another bank account, or through a transfer of cash at a cash ...

is the predominant payment method, invoices are commonly accompanied by standardised bank transfer order forms (like '' acceptgiros'' (Netherlands) and '' Überweisungen'' (Germany)) which include a field into which the invoice or client number can be encoded, usually in a computer-readable way. The payer fills in his account details and hands the form to a clerk at, or mails it to, his bank, which will then transfer the money. 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. Like the

cash register A cash register, sometimes called a till or automated money handling system, is a mechanical or electronic device for registering and calculating transactions at a point of sale. It is usually attached to a drawer for storing cash and other v ...

tape, the remittance advice serves as a record of cash initially received. Modern systems will often scan a paper remittance advice into a computer system where

data entry Data entry is the process of digitizing data by entering it into a computer system for organization and management purposes. It is a person-based process and is "one of the important basic" tasks needed when no machine-readable version of the inf ...

will be performed. Modern remittance advices can include dozens, or hundreds of invoice numbers, and other information. Remittance advices can be very complicated, especially in specialized fields like medical insurance payments.

References

{{Authority control Payments Accounting source documents Accounts payable Letters (message)

See also

References