What is payment advice note?
A payment advice note is a simple document a company sends to tell someone they have paid. It gives key details about the payment, like how much money was spent, what it was for, and the date it was sent. The payment advice goes together with the actual payment, like a note attached to a check. It makes record-keeping easier and helps avoid mix-ups about what got paid.
Why Payment Advice Notes are Used
Companies send out payment advice notes for a few main reasons:
- To be clear about what invoices or bills are being paid by that payment. This is important if a company has multiple invoices or orders with the same supplier or vendor. The advice note spells out exactly which ones that specific payment covers.
- Both parties should have the payment in writing as proof that it was really sent. This prevents misunderstandings, such as the recipient thinking they haven’t been paid yet.
- To explain any changes in the payment amount. Maybe a company is taking a discount they earned or holding back some money because of a dispute. The advice note is where they break down those details.
- For better bookkeeping and record-keeping on both sides. The company has proof they sent the funds, and the recipient knows to expect that money and can double-check that it matches their records. It keeps everyone’s books neat.
In short, payment advice notes keep everyone on the same page about money changing hands between companies. They reduce confusion and keep payments organized. They’re an extra layer of communication that helps business relationships run smoothly.
What Information is Included
A basic payment advice note should always have a few key pieces of information:
- The name and address of the company sending the payment
- The name and address of the supplier or vendor receiving it
- The date the payment advice was issued
- The payment amount
- The payment method (check, bank transfer, etc.)
- A breakdown of which invoice numbers or order numbers the payment is for
Some payment advice notes get more detailed, too, like listing the original amounts of those invoices, any credits or adjustments made, and the remaining balance if the payment doesn’t cover the full amount due. This extra info is helpful context for the recipient.
Payment Advice Note vs. Remittance Advice
A remittance advice is a very similar document to a payment advice note. Some people use the two terms to mean the same thing. Technically, a remittance advice is a notice that a payment was sent, while a payment advice note gives a heads-up that the payment will be on its way soon.
So, remittance advice says, “Hey, we sent the money today!” while payment advice says, “Hey, we’re going to send this amount in the next few days; here are the details.” But in everyday use, lots of folks use the phrases interchangeably. The core message of “money is coming your way, and here’s the scoop” is the same either way.
How Payment Advice Notes are Sent
Back in the day, payment advice notes were always printed on paper. They might be mailed together with a paper check or sent separately to give a heads-up that a bank transfer was coming. Many companies still use printed payment advice notes and old-school checks.
But these days, plenty of payment advice notes get sent electronically instead. They might be PDFs attached to an email or even just written out in the body of the email itself if it’s a simple payment. If a company pays with an electronic bank transfer or an online system, the payment advice details are usually submitted in the same system.
Using digital payment advice notes and electronic transfers speeds up the process and reduces paper clutter. However, some companies still prefer the classic printed route, especially if they pay by check. It just depends on the company.
