What is a remittance?
A Remittance is a transfer of funds to another bank account, sent as a payment or a gift.
Find out how you can send a remittance and the best methods for sending remittance advice to suppliers with Brex.
A remittance refers to a money transfer that is sent as a payment or gift to another party. You may send a payment remittance to meet a bill or invoice obligation. Transfers sent abroad from foreign workers to their family in a native country are also known as remittances.
What is remittance advice?
Suppliers may receive a remittance advice letter from their customers, which is a document informing them of a completed invoice payment. Customers often send it at the same time as the payment. Some sellers will include a remittance advice section on their invoices, which the customer can fill in and return.
It is not mandatory to send a remittance advice letter when you transfer money. They are seen as a courtesy, as they assist suppliers in matching a sum of money with invoices and record-keeping. They can also be useful for maintaining good lines of communication.
The practice of sending remittance advice is becoming less common, although it is more frequent in some industries and with certain payment methods like checks.
How to send remittance advice
If you are sending a remittance advice slip to a supplier, you should include:
- The invoice number.
- The payment amount.
- The payment method.
- Your name and address.
- Their name and address.
- The date you sent the remittance and when they can expect payment to be complete.
There are no legal guidelines on sending a remittance advice document to service providers. The most convenient method is by email. Notifying the supplier and creating a reference about an amount of money can be helpful for their records even if you make an online payment.
Ask the supplier for the appropriate email address before sending it. It may not be visible to the accounts department and could get lost if you send it to the general company email address.
You can also send a remittance advice slip through the mail as a letter. This is common practice for customers who pay by check and tends to be sent at the same time as the payment. If the invoice includes a remittance advice section, detach this, complete it, and return it to the address provided by the supplier.
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