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Getting paid

Remittance Advice

The short answer

Remittance advice is a short note from a client that says which invoice a payment covers. It matters most when several invoices are open. A bank transfer alone may leave it unclear which one was paid.

What it means

A bank statement shows that an amount landed in your account. It does not always show the invoice. This happens often when a client pays two or three at once, or leaves the reference blank. Remittance advice fills the gap. It is a short email or note, such as “paid $450 today against invoice #1042”.

If you are the one being paid, ask for it. Add a line to your payment instructions, such as “please quote the invoice number when you pay”. Then you do not have to guess or chase a client to match an unexplained deposit.

For example

Two invoices, #1041 and #1042, are both open with the same client. A $600 bank transfer arrives with no reference. Then a note arrives, saying that the $600 was for #1042 and the other is coming Friday. That note tells you which invoice to mark paid.

The mistake to avoid

Asking a client to pay by bank transfer without asking for the invoice number. You then have to guess which payment matches which bill.

See also

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