What is the purpose of a remittance advice?

The purpose of a remittance advice is to match a customer's payment with the invoice. Remittance advice is a letter sent by a customer to a supplier to inform the supplier that their invoice has been paid. If the customer is paying by check, the remittance advice often accompanies the check. Remittance advices are not mandatory, however they are seen as a courtesy because they help the accounts receivable department to match invoices with payments.

The remittance advice should specify the invoice numbers for which payment is tendered. Remittance advises can be very complicated, especially in specialized fields like medical insurance payments.