What is Remittance Advice?

Definition

Remittance Advice is a document sent by a payer to a payee detailing the payment of an invoice or financial obligation. It provides information on which invoices are being paid, the amounts, and any deductions or adjustments applied, facilitating accurate accounting and reconciliation.

Key Features

• Payment Details: Clearly specifies invoice numbers, amounts paid, and any deductions or credits applied.

• Reconciliation: Supports Remittance Matching to ensure payments align with outstanding invoices and accounting records.

• Audit Trail: Provides a documented record for internal and external audits, ensuring transparency and compliance.

• Cash Flow Management: Helps both payers and payees track payments, outstanding balances, and expected receipts.

• Error Prevention: Reduces errors in posting payments by providing detailed remittance information for accounting teams.

Summary

Remittance Advice is a detailed notification of payment sent from payer to payee. It ensures accurate invoice matching, proper reconciliation, and transparency in financial transactions.