A remittance advice tells a supplier that you have paid them and exactly what the payment covers. In this free Excel template you list each invoice being paid, take off any deductions or credit notes, and the total paid calculates automatically. Pick the payment method and date so the supplier can match the money in their bank.
Why send a remittance advice?
A single bank transfer often settles several invoices at once. Without a remittance, the supplier sees one amount and a short bank reference, and has to guess which invoices it clears. A remittance advice removes the guesswork and stops reminder letters for invoices you have already paid.
It is most useful when:
- One payment covers several invoices
- You have taken off a credit note or agreed deduction
- You are paying part of an invoice
- The bank reference field is too short for all the invoice numbers
Deductions and credit notes
Each line has an Invoice Amount and a Deduction. The Amount Paid on that line is the invoice amount less the deduction, and the totals at the bottom show all three: Total Invoices, Total Deductions and TOTAL PAID. A credit note goes on its own line as a minus invoice amount and shows in brackets.
Always give a reason for a deduction in the Notes box, such as “2% prompt payment discount” or “Short delivery, 4 units”. It saves a phone call later.
Keeping a record
Save each remittance under its number with the supplier invoices it relates to. Together they show what you paid, when and for what, which is the evidence behind the costs in your books. If you are self-employed, Making Tax Digital for sole traders explains how those expense records will be reported to HMRC.
