Remittance Advice is referred to as a document that a buyer sends to a seller in order to denote that an invoice has been paid for. The main reason it is created is to mirror an excellent gesture of goodwill. It is served as proof of payment. Therefore, it is considered equivalent to a cash register receipt.
Remittance Advice is created at a certain transactional point, which helps users to establish clear points of action that can facilitate better record keeping for the company, both internally, as well as externally. It helps improve communication with the other party with which business is being conducted.
What does Remittance Advice Include?
Remittance advice includes a number of things, which mainly include the name and address of the buyer, name address of the supplier, the date on which the amount was remitted, the amount which was remitted, the tentative delivery date when the goods are expected to be dispatched, the respective invoice number, the payment amount (balance if applicable), as well as method of payment.
However, this is something generic, because of the reason that all this information summarizes detail of the order, that can be used as a reference point in future dealings if required.
However, it can be seen that this is something that can also be customized as per the format that is used by the buyer, based on which seller can fill out the relevant information in that particular order.
Types of Remittance Advice
Remittance advice can take a number of forms. They mainly include the following:
- Basic Remittance Advice: The Basic Remittance Advice is formed as a type of note that defines the invoice number, as well as the total payment.
- Removable Invoice Advice: In some of the invoices that are used, sellers dispatch a slip in addition to the invoice. In this regard, the buyer is just supposed to fill the particulars in these slips and then send them back in the form of the remittance advice.
- Scannable Remittance Advice: Scannable Remittance Advice is a relatively newer approach directed towards electronic record keeping. It is often used as an input for electronic record keeping.
Advantages of Remittance Advice
In addition to the fact that remittance advice can be seen as a goodwill gesture extended by one party to another, it can be seen that there are a couple of other advantages of Remittance Advice. Here are some of them:
- Firstly, it can be seen that remittance advice can be used as a valuable resource in maintaining records. It is particularly useful for customers who settle their amounts via check.
- In the same manner, remittance advice is also useful in order to reconcile the amounts received, as well as the amount that was remitted. In case of any inconsistency, this document can be used as a reference point.
- In case of electronic tracking of payments, the orders can automatically be filled via scanning. Therefore, it acts as a double check point for companies.
Advantages of Using an Electronic Remittance Advice
Over the course of time process automation has greatly changed the overall state of affairs at different levels within the company. As a result of this, there have been innovations embedded into the overall system, and Electronic Remittance Advice can be stated as a prime example in this regard. The advantages of using electronic remittance are as follows:
- Firstly, it can be seen that it is regarded as an easy and convenient way to generate a receipt. Electronic remittance enables businesses to create quick receipts over the course of time, because of which they are able to give real-time proof of the payment that is received by the recipient in this aspect.
- It acts as an aid in the process of reconciliation. The reconciliation process is perpetual and real-time. It eliminates the chances of missing out on payments.
- The cost of running and maintaining electronic-based systems is relatively low and does not require constant upgrades.
Therefore, it can be seen that remittance advice is considered as a process that enables businesses to streamline their communication once a certain transaction has been made.
It contributes significantly towards helping companies to reconcile their amounts, and facilitate a smoother state of the transaction between the buyers and the sellers.
It is the responsibility of the account manager to maintain and keep these records, in order to ensure that they can be made available for points of reference if required. This tends to be the main premise behind remittance devices being created.