What is remittance advice? Types & best practices (2026)

Key Takeaways:

• Remittance advice is a document a payer sends to notify a supplier that a payment has been made. It helps both sides match payments to the correct invoices quickly and accurately.

• There are several types of remittance advice, from basic email notifications to Electronic Data Interchange (EDI) formats used in automated accounts payable systems.

• Airwallex helps Singapore businesses send international payments and manage multi-currency transactions, reducing the manual reconciliation work that comes with cross-border supplier payments.

What is remittance advice? In a nutshell, it’s a document that tells your supplier exactly what you have paid and which invoices the payment covers.

Without it, suppliers have to manually match incoming funds to open invoices — a process that wastes time and creates errors on both sides.

This guide explains what remittance advice is, the different types your business will encounter, what to include when creating one, and how to send and automate the process.

What is remittance advice?

Remittance advice is a document a payer sends to a supplier to confirm that a payment has been made. It is not the payment itself; it is the notification that accompanies or follows the payment, telling the supplier exactly which invoices the funds cover.

The term "remittance" refers to the transfer of money from one party to another. "Advice" in this context means a formal notification.

Together, remittance advice gives the receiving party the information they need to record the payment correctly and close out the relevant invoices in their system.

Why remittance advice matters

When a payment arrives in a supplier's bank account, the transaction record alone rarely contains enough detail.

It may show an amount and a sender name — but not which of five outstanding invoices the payment relates to, whether it covers a partial payment, or whether a discount was applied.

Remittance advice fills that gap. It gives the supplier's finance team a clear reference to match the incoming funds to the right invoices. This speeds up reconciliation, reduces back-and-forth between AP and AR teams, and lowers the risk of a payment being applied to the wrong account.

Who sends and receives remittance advice?

The payer — the business making the payment — creates and sends the remittance advice. The payee — the supplier or vendor receiving the payment — uses it to update their records.

In practice, this means your accounts payable team sends remittance advice to your suppliers each time you make a payment. Your accounts receivable team receives remittance advice from your customers when they pay you.

Remittance advice vs. proof of payment vs. invoices

Remittance advice is sometimes confused with other payment documents, including proof of payments and invoices. Here are the differences between them:

Types of remittance advice

Remittance advice comes in different forms depending on how it is delivered and how the payment information is structured. Understanding the different types helps you choose the right format for your business and your suppliers.

There are two ways to classify remittance advice: by delivery format (how it is sent) and by document type (how the payment information is presented).

By delivery format

By document type

Beyond how remittance advice is delivered, the document itself can take different forms depending on the payment arrangement:

Basic remittance advice

This is the simplest form. It lists the invoice number, the amount paid, and the payment date. It contains no physical tear-off section and is typically sent as an email or a standalone PDF. Most small and mid-sized businesses use this format for straightforward invoice payments.

Removable invoice remittance advice

This format combines the remittance advice with a copy of the original invoice. It is designed so the supplier can detach or separate the invoice portion from the payment confirmation. It is common in paper-based payment workflows where the supplier needs to file both documents.

Scannable remittance advice

This format includes a barcode or machine-readable element, allowing the supplier's AR team to scan and auto-import the payment data into their accounting system. It reduces manual data entry and speeds up reconciliation on the receiving end.

Electronic Remittance Advice (ERA)

Electronic Remittance Advice, or ERA, is a digital version of remittance advice transmitted directly between systems — most commonly between an ERP or AP automation platform and the supplier's accounting software.

ERA is widely used in the healthcare industry for insurance claim payments, but it is increasingly common in any sector where businesses process high volumes of supplier payments and want to eliminate manual reconciliation entirely.

What to include in a remittance advice

A remittance advice is only useful if it gives the supplier enough information to match the payment to the right invoices without having to follow up. A vague or incomplete document creates more work, not less.

Most remittance advice documents cover the same core information, regardless of format or industry. Here are the details to include:

Payer details

Include your business name, address, and contact information. If your supplier manages multiple accounts, also include your customer or account number as it appears in their system. This helps their AR team locate your account immediately.

Payee details

Include the supplier's business name and, where relevant, the name of the specific contact or department handling accounts receivable.

For international payments, also include the supplier's bank account details or payment reference number so they can match the incoming funds at their end.

Payment details

This is the core of the document. Include:

• Payment date — the date the payment was initiated, not the date it is expected to clear

• Payment amount — the total amount paid, clearly stated in the currency used

• Payment method — for example, bank transfer, PayNow, FAST, SWIFT, or cheque

• Payment reference number — the transaction ID or reference from your bank or payment platform

For international payments, it is good practice to also state the exchange rate applied and the original amount in your base currency, so the supplier can reconcile any currency differences on their end.

Invoice details

List every invoice the payment covers. For each one, include:

• Invoice number

• Invoice date

• Original invoice amount

• Any discounts or credits applied

• Amount paid against that invoice

If the payment covers a partial amount — for example, because a dispute is pending on part of an invoice — state this clearly and specify which portion is being paid.

Additional notes

If any deductions were made (early payment discounts, credit notes, returns, or adjustments), explain them in a notes field. Unexplained deductions are one of the most common causes of supplier disputes and delayed reconciliation.

How to create a remittance advice

Creating a remittance advice does not require specialist software. Depending on the volume of payments your business makes, you can use anything from a simple spreadsheet to a fully automated accounts payable platform.

Here is a step-by-step process that works for most businesses:

Step 1: Choose your format

For low payment volumes, a remittance advice template in Microsoft Excel, Google Sheets, or Word is sufficient.

For high payment volumes or international payments, consider using an accounts payable platform that generates and sends remittance advice automatically as part of the payment workflow.

If you use Airwallex to pay your suppliers, remittance advice is automated for you. Enable the Remittance Advice toggle in Vendor Management and Airwallex will send your vendors a notification — including the payment amount and invoice reference — every time you process a bill payment. Learn more about Airwallex Bill Pay or sign up for an account.

Step 2: Fill in the document

Use the format that matches what your supplier expects. If your supplier has specified a preferred format — for example, a structured PDF or an EDI file — use that. If they have not, a clean PDF with clearly labelled fields is the safest default.

Make sure every field is filled in accurately. The most common errors are:

• Wrong invoice numbers

• Missing payment reference numbers

• Unstated deductions or credits

• Currency mismatches on cross-border payments

Step 3: Review before sending

Have a second person check the document before it goes out, particularly for high-value payments. Confirm the total amount on the remittance advice matches the amount you actually transferred. A mismatch will cause reconciliation delays on the supplier's side.

Step 4: Send promptly

Send the remittance advice at the same time as the payment, or immediately after. Do not wait until the payment clears. The earlier the supplier receives it, the sooner they can match it to their open invoices.

How to send remittance advice

How you send remittance advice depends on your payment volume, the systems your suppliers use, and whether your payments are domestic or international.

There is no single correct method — what matters is that your supplier receives the document promptly and in a format they can act on.

By email

Email is the most common method for small and mid-sized businesses. Attach the remittance advice as a PDF and send it directly to your supplier's accounts receivable contact.

Use a clear subject line — for example, "Payment Remittance — Invoice #12345 — [Your Company Name]" — so the supplier can file and retrieve it easily.

If you regularly pay the same suppliers, create an email template so the format is consistent every time. Consistency makes it easier for your supplier's AR team to process your remittances quickly.

Through an accounts payable platform

Many AP platforms generate and send remittance advice automatically when a payment is processed. The document is delivered to the supplier via email or a supplier portal without any manual steps from your team. This is the most efficient method for businesses making a high volume of payments.

If your accounting software — such as Xero, QuickBooks, or MYOB — supports automatic remittance advice, enable this feature as part of your payment workflow setup.

Via Electronic Data Interchange (EDI)

For businesses with automated ERP systems, remittance advice can be transmitted directly as an EDI file — typically in formats such as ANSI X12 820 or EDIFACT REMADV. This method eliminates manual handling entirely.

The file is transmitted system-to-system and automatically imported into the supplier's accounting software. EDI is most common in large enterprises and industries with high transaction volumes, such as retail, logistics, and manufacturing.

For international payments

When paying overseas suppliers, always include the payment reference number from your bank or payment platform alongside the remittance advice.

International transfers, particularly SWIFT payments, can take several days to clear and may arrive with limited sender information. A remittance advice sent at the time of payment gives your supplier something to work with while the funds are in transit.

If the payment involves a currency conversion, state both the original amount in your currency and the converted amount in the supplier's currency, along with the exchange rate applied. This prevents disputes when the amount received differs slightly from the invoice total due to currency fluctuations or conversion fees.

Remittance advice example

Below is an example of a standard remittance advice document. It uses a fictional Singapore-based business paying a supplier in Malaysia. You can use this as a reference when creating your own template.

REMITTANCE ADVICE

From (Payer) Meridian Supply Co. Pte. Ltd. 18 Raffles Quay, #08-01, Singapore 048582 [email protected] +65 6123 4567

To (Payee) Apex Trading Sdn. Bhd. Attn: Accounts Receivable 42 Jalan Ampang, Kuala Lumpur 50450, Malaysia [email protected]

Payment Details

Invoice Breakdown

Notes

A 2.5% early payment discount was applied to INV-2026-0412 in accordance with the agreed early payment discount of 2.5%. No deductions were made to INV-2026-0438.

Please contact us at [email protected] if you have any questions about this payment.

This is an illustrative example for reference only. Company names, amounts, and details are fictional.

Benefits of remittance advice

Remittance advice benefits both the business sending the payment and the supplier receiving it. When used consistently, it reduces friction at every stage of the payment cycle — from the moment a payment is made to the point it is recorded in both parties' books.

Here are the main advantages for your business and your suppliers:

1. Faster payment reconciliation

When a payment arrives without any supporting information, the supplier's AR team has to investigate — checking bank statements, cross-referencing open invoices, and sometimes contacting you directly to ask what the payment is for.

This takes time and delays the closure of invoices on both sides.

Remittance advice eliminates that investigation. The supplier receives exactly the information they need to match the payment to the correct invoices and mark them as settled.

For businesses that pay multiple invoices in a single transaction, this is especially valuable. Without remittance advice, a bulk payment is almost impossible to reconcile without direct follow-up.

2. Fewer payment disputes

Disputes often arise not because of a genuine disagreement, but because of missing information.

A supplier who cannot identify which invoices a payment covers may flag it as underpayment or apply it to the wrong account. This creates unnecessary back-and-forth and can damage the supplier relationship.

Remittance advice gives both parties a shared record to refer to. If a dispute does arise — for example, over a discount applied or a partial payment — the remittance advice document provides a clear audit trail that both sides can review.

3. Better visibility and stronger supplier relationships

Sending remittance advice creates an internal record of every payment and which invoices it covers — making it easier to track outstanding liabilities and avoid duplicate payments.

On the supplier side, consistent and clear remittance advice builds trust. Suppliers who can process your payments without follow-up are more likely to offer better payment terms and priority service when you need flexibility.

A clear audit trail

Every remittance advice you send and receive forms part of your financial records. During an audit, or when resolving a discrepancy months after a payment was made, a complete set of remittance advice documents gives you a precise, date-stamped record of what was paid, when, and why — including any discounts or adjustments applied.

How to reconcile remittance advice

Reconciliation is the process of matching an incoming payment to the correct invoices in your accounts receivable records.

When a customer sends you remittance advice alongside their payment, reconciliation becomes straightforward. Without it, the process can take hours of manual investigation. Here’s how to reconcile remittance advice efficiently if you’re receiving it as a supplier.

Step 1: Match the payment to your bank records

When you receive a remittance advice, check your bank account or payment platform to confirm the payment has arrived or is in transit. Match the amount on the remittance advice to the transaction in your bank records using the payment reference number provided by the payer.

For international payments, allow for processing time: SWIFT transfers can take one to five business days to clear. Do not wait for the funds to arrive before beginning reconciliation. Use the remittance advice to prepare your records in advance.

Step 2: Identify the invoices being settled

Using the invoice breakdown on the remittance advice, locate each invoice in your accounts receivable system. Confirm that the invoice numbers, dates, and amounts match what you have on file.

If the remittance advice references an invoice you cannot locate, contact the payer immediately. Do not apply the payment to an unmatched account while the discrepancy is unresolved.

Step 3: Check for deductions or adjustments

Review the remittance advice for any discounts, credits, or partial payments applied. Confirm that each deduction is valid — for example, that an early payment discount was applied within the agreed terms, or that a credit note reference is correct.

If a deduction appears that you did not agree to, raise it with the payer before closing the invoice. Applying an unvalidated deduction creates an accounting error that is difficult to reverse later.

Step 4: Update and file your records

Once you have confirmed the payment and validated the invoice breakdown, update your AR system. Mark each invoice as paid, partially paid, or adjusted as appropriate, and record the payment date, payment reference number, and any deduction notes for your audit trail.

Then file the remittance advice alongside the corresponding invoices — whether in a cloud platform or a physical system — so you can retrieve it quickly if a dispute arises or an auditor requests it.

For cross-border payments, also retain the exchange rate information in case the amount received differs slightly from the invoice total.

Best practices for remittance advice

Sending remittance advice is a good start. To go one step further, follow these best practices:

Send it at the time of payment

Do not batch your remittance advice and send it at the end of the week or month. Send it the same day the payment is initiated — ideally within the same hour.

The earlier your supplier receives it, the sooner they can begin reconciliation. For international payments where funds take days to arrive, an early remittance advice gives the supplier's AR team time to prepare.

Use a consistent format

Pick a format and stick to it. Whether you use a PDF template, an accounting platform's built-in remittance feature, or an EDI file, consistency makes your remittances easy for suppliers to process.

A supplier who receives a different format every time has to spend extra time interpreting each document before they can act on it.

Always explain deductions

Any discount, credit note, or partial payment must be explained clearly in the remittance advice — do not leave the supplier to guess.

State the reason, the amount, and the reference (for example, a credit note number or an agreed discount rate). Unexplained deductions are the single most common cause of supplier disputes and delayed invoice closure.

Include a payment reference number

Always include the transaction reference number from your bank or payment platform. This is the link between your remittance advice and the actual bank transaction.

Without it, the supplier cannot confirm which incoming payment your document refers to, particularly when multiple payments from different customers arrive on the same day.

Confirm the correct contact

Send remittance advice directly to the supplier's accounts receivable team or the specific contact responsible for payment processing. Sending it to a general inbox or the wrong department adds unnecessary delay.

If you are unsure of the correct contact, ask when you first begin working with a supplier and record it in your supplier management system.

Keep a complete record

File every remittance advice you send and receive, organised by supplier and payment date. Most cloud-based accounting platforms store remittances automatically alongside the corresponding invoices, so this takes no extra effort once your workflow is set up.

How to automate remittance advice

For businesses making a small number of payments each month, creating and sending remittance advice manually is manageable. As payment volumes grow, manual processes become a bottleneck.

Automation removes the repetitive work and reduces the risk of errors that come with manual data entry.

How automation works

Most modern accounts payable platforms and accounting software packages can generate and send remittance advice automatically as part of the payment workflow.

When you approve and process a payment, the system pulls the relevant invoice data, populates the remittance advice template, and sends it to the supplier — without any additional steps from your team.

The same applies on the receiving side. Accounts receivable automation tools can read incoming remittance advice documents and automatically match them to open invoices in your system.

This eliminates the manual reconciliation step that would otherwise require a member of your AR team to cross-reference each document by hand.

Automating remittance advice with Airwallex

If you use Airwallex to pay your suppliers, remittance advice automation is built directly into our platform's Vendor Management feature.

Here’s how it works:

• Once you enable the Remittance Advice toggle in Settings, Airwallex automatically sends a notification to your vendor's email address every time you process a bill payment, whether in full or in part.

• The email includes the payment amount and the reference numbers for both the transfer and the invoice, giving your supplier everything they need to reconcile the payment immediately.

• You can also preview the remittance advice template before enabling the feature, so you know exactly what your vendors will receive.

The only requirement is that each vendor profile has an up-to-date contact email address — vendors without one on file will not receive the notification. Once that is in place, the process runs automatically with every payment you make through Airwallex Transfers.

Frequently asked questions (FAQs)

Is remittance advice mandatory?

No, remittance advice is not legally required in Singapore or most other jurisdictions — it is a business practice, not a regulatory obligation. That said, it is widely considered standard courtesy in B2B payments because it makes reconciliation faster and reduces the risk of payment disputes. Many suppliers actively request it, and some include a remittance slip with their invoices for the payer to complete and return.

What is the difference between remittance advice and proof of payment?

Remittance advice is a document the payer sends to explain what a payment covers — which invoices, amounts, and any deductions applied. Proof of payment is evidence that a transaction actually occurred, such as a bank transfer confirmation or a receipt from your payment platform. They serve different purposes: remittance advice helps the supplier reconcile their records, while proof of payment confirms the funds were sent.

Who sends remittance advice?

The payer — the business making the payment — sends remittance advice to the supplier or vendor receiving the payment. In practice, this means your accounts payable team sends remittance advice to your suppliers each time you settle an invoice. In some workflows, a supplier will include a pre-printed remittance slip with their invoice for the payer to complete and return alongside the payment.

How do I create a remittance advice?

A remittance advice should include your business details, the supplier's details, the payment date, amount, method, and reference number, and a line-by-line breakdown of every invoice the payment covers — including any discounts or credits applied. For low payment volumes, a simple PDF or spreadsheet template is sufficient. If you use accounting software such as Xero or QuickBooks, check whether it generates remittance advice automatically when you process a payment.

How do I send remittance advice?

The most common method is email: attach the remittance advice as a PDF and send it directly to your supplier's accounts receivable contact at the same time as the payment. If you use an accounts payable platform, it may generate and send remittance advice automatically when a bill is paid. Airwallex, for example, sends remittance advice notifications automatically to vendors when a bill payment is processed through the platform¹. For businesses using ERP systems, remittance advice can also be transmitted as an EDI file directly between systems.

Is remittance advice the same as a receipt?

No. A receipt is issued by the seller to confirm that payment has been received. Remittance advice is issued by the buyer to notify the seller that payment has been sent and to explain what it covers. They flow in the same direction — from payer to payee — but a receipt is a post-payment confirmation from the receiving side, while remittance advice is a pre- or at-payment notification from the paying side.

Sources:

1. https://help.airwallex.com/hc/en-gb/articles/12450362301583-Sending-a-Remittance-Advice-to-a-Vendor

This publication does not constitute legal, tax, or professional advice from Airwallex, nor does it substitute seeking such advice, and makes no express or implied representations / warranties / guarantees regarding content accuracy, completeness, or currency. If you would like to request an update, feel free to contact us at [[email protected]]. Airwallex (Singapore) Pte. Ltd. (201626561Z) is licensed as a Major Payment Institution and regulated by the Monetary Authority of Singapore.