This article explains all. A remittance advice is a document which provides a breakdown of the invoices included on a payment. It is sent from a customer to a supplier letting the supplier know they have paid their invoice.
Whenever you pay a supplier you should also send them a remittance advice which shows each invoice and credit note you have paid and the total amount of the payment. This allows the supplier to correctly allocate your payment against invoices, saving both the supplier and the customer time if they had to correspond with each other to reconcile payments. You should include the same information for any credit notes which are included in the payment.
You also need to show the total amount paid and also the date the payment was made or is going to be made. The remittance should be printed on company headed paper showing details of the person to contact in case of any queries.
If your business is in the construction industry you may be required to deduct CIS tax from payments to some suppliers. Speak to your accountant if you are unsure whether this applies to you as they would usually complete the relevant forms.
If you do deduct CIS tax then you need to show on your remittance advice how much has been stopped on each invoice. As with most other aspects of a business, remittances are now more commonly sent by e mail.
If you are paying electronically the remittance should be sent at the time the payment is made. It is important to keep copies of remittances you send to suppliers and those that you receive from customers. There may be a query with an invoice in the future which requires you to refer back to a remittance advice.
But what is remittance advice? Find out everything you need to know with our comprehensive guide. It covers virtually any payment, from bills to invoices, and is typically used with overseas payments — when one party is based in another country.
In addition, remittance can also cover personal money transfers made to friends and family. So, what is remittance advice? In short, remittance advice is a proof of payment document sent by a customer to a business. In a sense, remittance slips are equivalent to cash register receipts. Because online payments are becoming increasingly popular, remittance advice slips are sometimes unnecessary.
However, after an invoice has been paid, sending a confirmation email is always appreciated. Several key pieces of information need to be included on your remittance advice slip. Most importantly, the slip should identify:. The remittance advice slip should be issued on company headed paper and contain contact details for a member of your organisation who can deal with any queries the supplier may have.
No, remittance advice slips are not obligatory. However, they are a courtesy that suppliers are likely to appreciate, as they can be very helpful for recordkeeping and identifying which payments are associated with which accounts.
Basic remittance advice — Basic note or letter stating the invoice number and the payment amount. Removable invoice advice — An invoice that comes with a removable remittance slip that customers are encouraged to fill in.
What is a 'remittance advice', and does your business need to produce them? Team Nomisma Sep 16 What is a remittance advice? Why is a remittance advice note useful? Information you should put on a remittance advice You should take care to put the following information on the remittance note.
How to issue a remittance advice People are generally unsure about how to issue a remittance advice. Electronic — It seems that everything is moving online, and remittance advice is no exception. As most payments are made online, then considersending remittance advice notes by email. Should I keep copies of remittance advice?
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