Remittance Advice

Remittance advice is a notification issued by a buyer to a supplier at the time of making a payment. It lists the invoices being settled, any credit notes being offset, and the total amount being transferred. Its primary purpose is to help the supplier's finance team match an incoming bank receipt to specific open invoices without manual investigation.

The document does not itself transfer funds - the payment is made separately, typically via bank transfer or BACS. But remittance advice eliminates the reconciliation work that follows a lump-sum payment arriving with nothing to explain what it covers.

What Remittance Advice Contains

A standard remittance advice includes the paying company's name and contact details, the payment date, the payment reference or bank transaction number, a list of invoice numbers being settled with the amount applied to each, any credit notes being offset, and the net total being paid. It may also note any invoices being held back and the reason for the short payment.

Most businesses send remittance advice by email today, either as a PDF or in the email body itself. Accounting platforms generate and send it automatically as part of a payment run, which removes the manual step entirely.

Why Remittance Advice Matters for Both Parties

For the supplier, remittance advice is the difference between a clean accounts receivable ledger and hours spent tracking down what a bank receipt covers. Without it, a payment that settles 12 invoices of varying amounts forces the finance team to work backwards - matching the total to open items manually, often with partial payments and credit notes adding further complexity.

For the buyer, sending remittance advice is good practice for the relationship. It demonstrates organized financial management, reduces the likelihood of chasing calls from suppliers who cannot reconcile the payment, and creates a paper trail for audit purposes. In businesses running Zigaflow, outgoing payments to suppliers can be linked directly to the purchase orders and invoices they settle, keeping the procurement and finance records consistent.