What is a remittance advice used for?

• A. When a customer sends payment they should mention which invoices they are paying.
• B. A note used to request payment.
• C. A receipt given to customers for payment.
• D. A document used to confirm delivery.

Answer: (A)

Remittance advice is a message that accompanies a payment, telling the supplier which invoices are being paid. Its main purpose is to help match the cash received to the correct invoices and update the customer’s account accurately. Without it, payments could be posted to the wrong invoices, causing confusion and extra work to sort out allocations. So when a customer sends payment, they should include details of the invoices they are paying, which is exactly what remittance advice provides. It isn’t a request for payment, a receipt, or a delivery confirmation.