In this article, we’re exploring remittance advice meaning, purpose, and how to send.
In fact, whether you’ve been provided with a remittance advice slip or asked to send one post-transfer, you’ll uncover everything you need below.
This is part of our free series on sending a bank transfer and making the most out of your bank account, which you can access here.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Remittance Advice Meaning
- Why is Remittance Advice Important?
- How to Send Remittance Slips?
- Frequently Asked Questions
- Ready to Explore Your Options?
Remittance Advice Meaning
Remittance advice meaning is simply the confirmation of payment from a customer to a vendor. More specifically, remittance advice is sent to a vendor after a customer has sent a bank transfer or similar form of payment to fulfill payment for an outstanding invoice. In many cases, businesses request remittance advice while in other cases, customers provide remittance advice voluntarily.
When a business requests remittance advice, the meaning of how they want the customer to fulfill this request may differ.
For example, many businesses that request remittance advice include a pre-filled form along with an invoice they send. This may be a separate form or a tear-away voucher attached at the bottom of the invoice.
Alternatively, businesses may simply request that their customers issue remittance advice as part of their contractual agreement, meaning the business automatically expects their customers to send remittance advice after each payment.
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Why Is a Remittance Advice Important?
Remittance advice is important because it provides the vendor (or supplier) with proof of payment, which can then be used to associate the customer’s payment with an incoming transfer.
This is especially important when a business receives many payments of similar value from many different customers, allowing a business’ billing department to quickly identify the payee.
Remittance advice is also important for the customer, it means that their payment will be quickly associated with their order and the vendor will not accidentally think that they have an outstanding balance on their account.
Proof of Payment
Of course, there are other forms of proof of payment that businesses and customers may find more convenient. This can include sending a copy of a transfer confirmation by email, requesting that the bank automatically emails the vendor when payments are sent with the relevant information, or actually using a different form of payment like a credit card (depending on the value of the payment).
How to Send Remittance Slips
To send remittance slips, customers should first confirm how the business wants to receive this information. Certain businesses include pre-filled remittance advice slips with their invoice, while others request remittance slips with no direction for the customer.
If you have been asked to provide a remittance slip and a pre-filled form has not been provided you will need to include the following information:
Sending a Bank Remittance Advice Slip
Remittance advice slips should include all of the necessary information to confirm a transfer, meaning the following details:
- Invoice number being paid
- Name of the payee
- Address of the payee
- Amount being paid
- Method of payment
- Date of payment
- Appropriate contact information
If you are sending payment from one company to another, it’s customary to print the remittance advice on company letterhead with all of the relevant company information listed for the vendor.
Frequently Asked Questions
Below are three of the most common questions that we receive from people asking what the meaning of remittance advice is. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Is Remittance Advice?
Remittance advice is proof of payment that is sent from a customer to a vendor or supplier. Remittance advice is commonly used when making a bank transfer to a vendor. This can be helpful when a business has many customers. Likewise, when a single customer places many orders, remittance advice can help associate a payment with a specific invoice. This allows them to quickly associate a transfer with the appropriate customer, so accounts can be accurately settled.
What Are the 2 Types of Remittance Advice?
The two types of remittance advice are basic remittance advice and removable remittance advice. Basic remittance advice refers to the customer sending a letter with key information about the transfer and the payee to the vendor. Removable remittance advice refers to a document that is attached to an invoice for the customer to fill out when payment has been completed. In both cases, remittance advice is sent to the vendor after the information has been included.
Who Sends a Remittance Advice?
Remittance advice is sent by a customer to a vendor in order to inform them that payment has been sent for a particular invoice. In doing so, both vendors and customers can be served by payments and invoices being quickly and accurately associated with one another.
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