Remittance advice: Definition, types, and benefits
Send remittance advice to match payments to their invoices, speed up reconciliation, and cut supplier back-and-forth.
Written by Chelsea Heywood—Small business growth and marketing writer. Read Chelsea's full bio
Published Thursday 9 July 2026
Table of contents
Key takeaways
- Send a clear remittance notice that links payments to specific invoices so suppliers can reconcile payments quickly and accurately.
- Stick to consistent identifiers: invoice numbers, supplier codes, dates, and payment references.
- Pick a format that fits your volume and partners: remittance email or PDF, EFT remittance, or Electronic Data Interchange.
- Use accounting software to automate remittance processing and reduce back-and-forth with suppliers.
What is remittance advice?
A remittance advice is a document you send to a supplier to show which invoices you've paid and how the payment was made. Your supplier can use it to match the money they receive from you with the correct invoices in their records.
It helps to keep two terms separate. The remittance is the payment itself, the money you send. The remittance advice is the notification document that goes with it, telling your supplier what the payment covers.
If you pay several invoices in one bank transfer, the payment itself won't show a breakdown of the invoices it covers. A remittance advice lists them so the supplier can reconcile the payment quickly and accurately.
Most businesses send remittance advice when paying by Electronic Funds Transfer (EFT), reflecting Australia's shift to electronic payments, with fewer than one cheque per person written in 2023. It's usually emailed as a PDF, generated through your accounting software or automated payment systems.
It's worth noting that remittance payment advice doesn't confirm a payment has cleared; it simply lets the supplier know a payment has been made or is on its way.
For small businesses, sending a remittance advice is a simple way to keep your payment records organised, reduce back-and-forth with suppliers, and make reconciliation easier.
Why remittance advice matters
For businesses managing many invoices, payments can quickly become difficult to track. Remittance advice helps solve this by:
- speeding up reconciliation, allowing businesses to quickly match incoming payments to the correct invoices
- reducing payment disputes by clearly showing what has been paid
- keeping accounting records organised with clear documentation of each payment
- improving cash-flow visibility by showing exactly which invoices have been settled
- reducing the need for bookkeepers and finance teams to investigate unclear payments
Clear remittance advice helps both sides: you keep your own payment records tidy, and your supplier gets what they need to reconcile without chasing you.
For small and medium-sized businesses (SMEs), even small delays in invoice reconciliation can create extra work. When remittance advice is included with payments, bookkeepers spend less time chasing information and more time focusing on higher-value tasks.
What remittance advice includes
Remittance advice documents can vary slightly between businesses or accounting systems. However, most include the same core information to easily identify a payment.
A typical remittance notice includes:
- your business's name, address and contact information so the recipient knows who the payment is from
- details of the business receiving your payment
- the date the payment was made
- your payment method, such as EFT, bank transfer, or cheque
- a unique payment reference number to identify the payment
- the invoices that the payment relates to and each invoice amount
- the total amount of the payment you've made
Some remittance advice may also include additional notes explaining partial payments, deductions, or adjustments.
For example, if a customer pays only part of an invoice due to a credit or dispute, the remittance advice can explain the difference. This helps suppliers understand the payment without needing to follow up.
Remittance advice example
If your business pays a supplier $1,500 for three invoices of $500 each, the remittance advice would list:
- each individual invoice number
- the three $500 amounts paid
- the $1,500 total amount
- the date your business made the total payment
This gives the supplier everything they need to match your payment to their invoices quickly and accurately.
Types of remittance advice used
Businesses send remittance information in different formats depending on their accounting systems and processes. The main formats include email, Electronic Data Interchange (EDI), paper, and Australian Banking Association (ABA).
Sending a remittance email
Email is the most common way for small businesses to send remittance advice. Similar to electronic invoicing, your accounting software or payment system generates and sends the remittance advice document to the supplier as a PDF or digital attachment, listing the invoices you've paid.
This method is quick, easy, and works well for regular electronic payments. For example, you might email your remittance advice after completing an EFT remittance.
Electronic Data Interchange (EDI)
Larger businesses often use EDI systems to send remittance advice automatically. EDI transmits the information in a structured digital format, allowing the supplier's accounting system to match invoices and payments with minimal manual effort.
Paper remittance advice
Although less common today, some businesses still send remittance advice on paper, often attached to a cheque or as a separate document. Cheques are on the way out: the Australian Government is winding down the cheques system by 2030.
This lists the invoices being paid and provides the same information as electronic formats. However, it's a much more manual process and can add to a finance team's administrative burden.
Australian Banking Association (ABA)
When paying suppliers electronically, for example by EFT, businesses may send remittance information as an ABA file.
This structured file includes payment amounts, supplier details, and invoice references, making it easier for suppliers to match payments to invoices. ABA files are common formats for larger batch payments.
How remittance advice helps with reconciliation
Reconciliation involves matching payments with invoices so accounting records stay accurate. Remittance advice makes this process simpler for both the payer and the payee.
Sending remittance advice ensures your payment details are clear. This helps your suppliers match the payment to the correct invoices quickly during their invoice reconciliation, reducing follow-up queries and keeping your own records organised.
Receiving remittance advice helps you reconcile incoming payments more efficiently. Instead of guessing which invoices a payment covers, you can match it instantly, saving time and reducing errors during reconciliation.
As your business grows and transactions increase, sending clear remittance advice helps avoid confusion, save time, and keep both your records and your suppliers' records organised.
Not receiving remittance advice? Here's how to ask
If you want to receive remittance advice from buyers to support reconciliation, you can:
- include a note in the payment terms of invoices, for example: "Please provide remittance advice when making payment to help us reconcile your payment quickly."
- communicate directly with buyers to confirm or request that they send remittance advice with each payment, and explain the benefits of doing so
- specify a preferred method for receiving remittance advice, such as email, PDF, or EDI remittance advice, making it easier for buyers to comply
Some accounting software can automatically prompt buyers with reminders, or provide a remittance advice template when sending payments.
Buyers may be willing to send remittance advice to reduce errors, avoid follow-up emails, and speed up payment processing.
How to send remittance advice
Sending remittance advice is simple and can be done manually or automatically depending on the tools your business uses.
To send a remittance advice:
- Record the invoices you're paying in your accounting system, along with the payment method.
- Generate a remittance advice document. Many accounting platforms automatically create one based on the payment details, but you may need to generate one manually if needed.
- Check the payment information to confirm the invoices, amounts, and payment date are correct.
- Send the remittance advice to the supplier, usually by email or through your accounting system.
- Keep a copy for your records to maintain a clear audit trail.
As payment volumes grow, many businesses choose to automate this process so remittance advice is generated and sent automatically when payments are made.
Reconcile payments faster with Xero
Managing payments and remittance advice manually can take time, especially for businesses that process many invoices. Accounting platforms like Xero help simplify this process by connecting invoicing, payments, and bank reconciliation in one system.
With Xero, businesses can:
- generate remittance advice automatically when paying supplier bills
- email remittance advice directly to suppliers from the platform
- match bank transactions with invoices quickly using bank feeds
- keep payment records organised in one place
These features help reduce manual work and make reconciliation faster and more accurate, improving your payment workflows and reducing bookkeeping time.
FAQs on remittance advice
Have questions about remittance advice? These answers cover the most common ones, so you can send, receive, and reconcile payments with confidence.
Is remittance advice proof of payment?
No. Remittance advice tells the supplier that a payment has been made or is being processed, but proof of payment comes from a bank confirmation or a cleared transaction on a bank statement.
Are businesses required to send remittance advice?
No. There's no legal requirement in Australia to send it, but it's a widely accepted practice because it gives suppliers clear payment details and keeps records accurate.
Why did I receive a remittance advice with a cheque?
The remittance advice lists the invoices the cheque is intended to pay. You can use it to record the payment once the cheque has been deposited.
What is the difference between remittance advice, an invoice, and a receipt?
An invoice is a supplier's request for payment, remittance advice is the payer's note explaining which invoices are being paid, and a receipt confirms the payment was received. Together they record the full payment cycle.
What is EFT remittance in Australia?
EFT remittance is remittance advice sent alongside an Electronic Funds Transfer payment, explaining which invoices the transfer relates to so the supplier can match the deposit to their records.
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