What Is a Remittance Advice?

A remittance advice is a short document a payer sends to confirm a payment, listing what it covers, such as invoice numbers, amounts and any deductions. It is proof that a payment has been made, not a request for one.

That is the difference from an invoice. An invoice asks to be paid and sets out what is owed; a remittance advice follows the payment and says which invoices, or which parts of them, it settles.

For a UK recruitment agency, remittance advice comes up most often alongside self-billing. HMRC's VAT Notice 700/62 describes self-billing as an arrangement in which the customer prepares the supplier's invoice and forwards a copy to the supplier with the payment. An agency paying contractors this way commonly sends a remittance advice with each payment too, so the contractor can see exactly which weeks and rates it covers. That is standard accounting practice, not a requirement of the notice itself.

Outside self-billing, a remittance advice can accompany any payment where the payer wants to be clear about what it settles. A client paying several outstanding invoices in one bank transfer might send a single remittance advice covering all of them. There is no statutory format; the payer's name, the date, the amount and a clear reference to what it covers is enough for basic bookkeeping.

Because it sits on the invoicing side of the job, a missing or unclear remittance advice is usually what makes a bank payment hard to reconcile against the invoices it was meant to settle.