What is remittance advice? Complete guide for your business

Key takeaways

• Remittance advice is a document a payer sends to a payee to confirm that payment's been made, helping the payee match the payment to the right invoice.

• It usually includes the payment date, amount, invoice number, and payment method. You can send it by email, through an online portal, or via Electronic Data Interchange (EDI).

• Airwallex lets you automate remittance advice and manage cross-border payments on a single platform, with transfers across 200+ countries.

Remittance advice is a document that tells a payee a payment's been sent and which invoice it covers. For businesses sending or receiving payments, it's the link between money landing in an account and knowing exactly what that money is for.

As payments have gone digital and cross-border payments have become routine, the way businesses handle remittance advice has changed too. In Australia, cheques now account for less than 0.1% of total volume of retail payments, and the Australian Government is now winding down the cheque system.¹ The shift away from cheques has changed how remittance information moves between buyers and suppliers. Below, we'll cover what remittance advice is, the different types, what to include, the benefits, and how to automate the process.

What is remittance advice?

Remittance advice, also called payment advice or payment notification, is a document that a payer sends to let a payee know about a payment. Think of it like the note you'd add to a bank transfer saying "this is for invoice #1234." It gives the recipient the information they need to match incoming money to the right invoice.

When a payer issues payment on an invoice, they send remittance advice with details like the amount, date, payment method, and relevant reference numbers or invoice details. This document helps the payee reconcile the payment with their records, which is useful for accounting and audit purposes.

It's especially useful for international wire transfers because those often involve larger sums of money and multiple parties. When both sides have clear remittance details, it's much easier to track and reconcile payments, and you're less likely to run into errors or disputes.

Remittance vs remittance advice

These two terms sound similar, but they mean different things. A remittance is the act of sending money, especially across borders. Remittance advice is the notification document that comes with or follows a payment. Think of it this way: a remittance is the parcel, and remittance advice is the delivery notification telling you what's inside.

For example, if you wire A$10,000 to a supplier in Singapore, the wire transfer is the remittance. The document you send saying "this payment covers invoices #401 and #402" is the remittance advice.

Is remittance advice mandatory?

In Australia, sending remittance advice isn't legally required. But it's widely seen as best practice, especially for B2B transactions.

Without remittance advice, your supplier might apply your payment to the wrong invoice or chase you for money you've already paid. Spending a few seconds sending remittance advice can save hours of back-and-forth later.

Types of remittance advice

Remittance advice can come in a few different forms, from a simple email to an automated system-to-system exchange. The right format depends on your business size, payment volume, and how your suppliers prefer to get the information.

Email

Email is the most common format for small and mid-sized businesses. You can send remittance advice as a standalone email or attach a PDF with the payment details. It's fast and doesn't need any special software.

The risk is that emails can be missed or end up in spam. Use a clear subject line like "Payment confirmation - Invoice #1234" so it doesn't get buried in your supplier's inbox.

Paper-based

This remittance advice is printed or given as a handwritten document. It commonly goes with cheques in the post to show what they're paying for. It's still used in industries with legacy processes.

Online

Another way of sending remittance is through an online portal. This type of advice is common for large enterprises processing online payments or businesses using supplier portals.

EDI 

EDI sends remittance data straight between accounting systems, so there's no need for manual data entry. It's most common among large enterprises with high payment volumes, where manual processes would be impractical.

For example, a retailer paying hundreds of suppliers each month can use EDI to send remittance advice automatically from their ERP system to each supplier's system.

The data goes straight into the supplier's accounts receivable without anyone having to retype invoice numbers.

What's information is included in remittance advice?

Whether you're sending remittance advice by email or through an EDI system, the core information is the same. Here's what to include:

1. Payer information:

• Company name (or letterhead)

• Company address

• A point of contact for enquiries regarding the payment or remittance

2. Payee information:

• Company name

• Company address

• Contact details for the individual, team, or department that the payment/remittance addresses

3. Payment details:

• Date of payment initiation

• Amount paid

• Payment method (e.g., ACH transfer, wire transfer)

• Payment reference number

4. Invoice/service details:

• Invoice or account numbers

• Invoice dates

• Invoice amount

• Amount applied to each invoice

• Discounts or adjustments

• Outstanding balance, if applicable

5. Any notes or additional information

Remittance advice example

A typical remittance advice document includes the payee and payer details, date of payment, payment amounts, the expected deposit date, and key invoice details such as invoice numbers. Templates can vary in layout, but they should always cover the five categories listed above so the recipient has everything they need to reconcile the payment.

Now that you know what remittance advice is and what it should contain, let's look at why it matters for your business.

Benefits of remittance advice

Sending remittance advice might feel like an extra step, but it helps with smoother operations and stronger supplier relationships. Here's how:

Faster, more accurate reconciliation

When the payee gets remittance advice, they can match the payment to the right invoice straight away without chasing the payer. That speeds up reconciliation and cuts down on errors.

Take this example. If a supplier gets an A$15,000 payment with no remittance advice, they might spend hours working out which of your five outstanding invoices it covers. With remittance advice, they can match it in seconds.

Consistent formats for global transactions

When you're working with suppliers in different countries, inconsistent remittance formats can create confusion. Standardised formats, especially EDI, reduce errors by making sure senders include all the necessary information in a structure that's easy to process across different systems and regions.

Better cash flow visibility

With remittance advice in hand, you can track payment patterns and predict cash flow more accurately. If you can see that a major client consistently pays 10 days after you send remittance advice, you can plan your cash flow around that pattern instead of guessing when the money will arrive.

Reduced fraud risk

You can secure digital remittance advice with encryption and authentication methods so sensitive data doesn't end up in the wrong hands. Digital systems also give you a clear audit trail, which helps with compliance and dispute resolution. If there's ever a question about whether a payment was made, you've got documentation to prove it.

Greater transparency for suppliers and customers

You can also set up self-service portals where customers and vendors can access remittance advice slips and other financial documents at any time without needing to contact you. Suppliers can check payment status themselves, which saves time on both sides and reduces the administrative burden on your team.

How to automate remittance advice with Airwallex

If you're sending payments to suppliers across multiple countries, you're probably dealing with different currencies, formats, and timelines. Creating and sending remittance advice manually for each payment adds up fast. Here's how Airwallex helps:

• Bill Pay: Automate supplier payments and accounts payable. Upload, approve, and pay invoices – and reconcile them back to your accounting software – all in one place.

• Global Accounts: Receive payments in 20+ currencies with local bank details, making it easier for international customers to pay you and simplifying the remittance trail.

• FX & Transfers: Send cross-border payouts at interbank rates across 200+ countries. Fewer cross-border fees mean more of your payment reaches the supplier.

• Accounting integrations: Connect with Xero, QuickBooks, NetSuite, and more to sync payment data automatically. When a payment goes out, your accounting software updates, and reconciliation happens without manual data entry.

Frequently asked questions 

Is remittance advice a refund?

No, remittance advice isn't a refund. It's a document that tells the recipient about a pending payment. Remittance advice usually relates to payments, but it can also notify a business of an incoming refund.

Who sends remittance advice?

Usually, the business making the payment sends remittance advice to the supplier or vendor when paying an invoice. But a supplier can also send a blank remittance advice form with their invoice. The receiving business can then fill out this form and send it back to the supplier.

Is remittance advice proof of payment?

Not exactly. Remittance advice confirms that a payment's been initiated, but it doesn't prove the funds have arrived. The payee should check their account to confirm receipt before treating the invoice as paid.

What's the difference between remittance advice and an invoice?

An invoice is a request for payment. Remittance advice is confirmation that payment's been sent. They work together: you send the invoice first, and the remittance advice references the invoice number so the recipient knows which invoice the payment covers.

Do I deposit a remittance advice cheque?

If you receive a cheque along with remittance advice, then yes, you should deposit it. Check the remittance document to see which invoice or account you should apply the payment to.

Sources

1. https://treasury.gov.au/sites/default/files/2024-11/p2024-555854.pdf

Disclaimer: This information doesn’t take into account your objectives, financial situation, or needs. If you are a customer of Airwallex Pty Ltd (AFSL No. 487221) read the Product Disclosure Statement (PDS) for the Direct Services available here.