Remittance advice

Definition

A remittance advice is a document sent by a customer to a supplier to inform them that their invoice has been paid. It typically includes details such as the amount paid, the invoice number, and any deductions or adjustments made.

5 Must Know Facts For Your Next Test

1. Remittance advice helps suppliers match payments with invoices, reducing errors in accounts receivable.
2. It can be sent in various formats including paper, email, or electronic data interchange (EDI).
3. Remittance advice often accompanies payments but can also be sent separately.
4. It may include details like payment date, method of payment, and references to multiple invoices.
5. Using remittance advices simplifies the reconciliation process for both payers and recipients.

Review Questions

Related terms

Invoice: A document issued by a seller to a buyer indicating items sold, prices, and terms of sale.

Accounts Receivable:

The money owed to a company by its customers for goods or services delivered on credit.

Electronic Data Interchange (EDI): The computer-to-computer exchange of business documents in a standard electronic format between business partners.