A payment remittance, more fully a remittance advice, is a note from the payer telling the payee which invoices a payment covers. It has no legal weight and it removes a surprising amount of work on both sides, because a payment arriving without one cannot be allocated, and an unallocated payment produces a phone call to whoever sent it.
What it contains
Your name, the payment date, the total transferred, and the list of invoices settled with their numbers and amounts, plus any credit notes applied. The list is the whole point. A supplier receiving a single transfer covering eleven invoices cannot allocate it without knowing which eleven, and their guess will produce a disputed statement later.
Why it saves you work
Unallocated payments generate supplier queries, which land on your team. They also produce supplier statements that will not reconcile, which then need reconciling, which lands on your team again. Sending the remittance prevents both at effectively no cost, which makes it one of the very few payables improvements with no trade-off at all.
When it matters most
Where one payment covers several invoices, where credits are applied, and where the total differs from any single invoice. Those are precisely the cases a supplier cannot resolve alone. Sending remittances only for simple single-invoice payments is sending them where they were least needed and skipping them where they were essential.
Questions people ask about payment remittance meaning
Is a remittance required by law?
Generally not, and it is a strong convention because it makes the payment usable. Requirements vary, so check your own if it matters to you.
How should it be sent?
By email to the supplier's accounts address, automatically as part of the payment run. Manual sending is what gets skipped in a busy week.
Is it the same as a receipt?
It serves a similar purpose from the payer's side: telling the payee what was settled rather than acknowledging money received.
What if a supplier ignores remittances?
Some do, and it costs you nothing to keep sending them. The ones who use them stop telephoning, which is most of the benefit, and the ones who do not were going to reconcile their own way regardless.
Should a remittance be sent for a partial payment?
Especially then. A part payment against one invoice is the case a supplier is least able to interpret alone, and it is the case most likely to end up on a disputed statement three months later.