Remittance Advice Letter

A remittance advice letter, also known as a remittance advice slip, is a letter sent by the customer to the supplier/seller in order to inform them that the seller’s invoice has been paid. This is usually accompanied by the cheque the customer sends us a payment.

If the payment is not being made through cheque, the letter can simply be sent solely. Although, it is not a mandatory document yet the customer sends it to help the seller match his invoices with the payments and hence manage his account statements and ledgers easily.

Due to the globalization of businesses and economic migrations across the globe, the number of remittance transactions has increased tremendously. Remittance is the amount of money that one pays or sends to another country. The remittance payment could be used to clear an invoice, pay an employee or send to one’s home, etc. The time taken to process a remittance transaction is called a remittance float.

When sending a remittance payment for a business or invoice payment to a seller, a customer usually attaches a remittance advice letter to notify the seller that the invoice has been cleared. A remittance advice letter usually includes:

  • Date
  • The customer details
  • The seller details
  • Invoice number
  • Invoice amount
  • Method of payment

A remittance advice letter serves as a notifying document about the paid invoice to the seller and not exactly as a proof of payment. The customer sends this letter to inform and help the accounts department of the seller in matching the cash inflows to the invoices.

If paying through cheque is a prevalent payment method in a country, the organizations often design their invoices accordingly. As a remittance advice letter is not a mandatory letter, the customer may or may not send it. Therefore, organizations add a part/section in the invoice that needs to be returned to them by the customer which serves the purpose of a remittance advice letter. This is helpful for the organizations in managing their cashflows which is the reason behind adding this section to the invoice.

A remittance advice letter is a convenient and courteous way to inform the seller that his account has been debited with the customer’s payment. However, as the trend of online banking and online payments is increasing, the popularity of remittance advice letters is on the verge of declining. At the same time, there are some organizations who still like to inform their sellers by sending them an email as a replacement to this letter which serves the same purpose.

Sample Remittance Advice Letter

I am writing this letter to inform you that the payment for invoice number [INVOICE#] dated 20th July 20XX of the amount of $250 for ABC corporation has been paid. I am attaching a cheque with this letter as a payment to the invoice for bean bags purchased.

If you have any questions, feel free to contact me at [Contact#]. You may deposit the cheque and let me know if any issue arises although everything is clear from my side.


Emily Watson.

Remittance advice letter