What is remittance?
Definition of remittance
Remittance is an amount of money sent as payment or as a gift. While the term “payment” is far more common, remittance is often used to describe money transferred abroad.
Example of remittance
When a customer pays an invoice, the payment you receive is remittance.
What is remittance advice?
When a customer sends money to you, they may include a remittance advice: a document or note informing you that they have made the payment after receiving an invoice. Remittance advice notes include the:
- invoice number
- payment amount
- method of payment
While including remittance advice is not mandatory, some businesses choose to include them as a courtesy as they can be useful for matching payments to invoices and keeping books in order.
Remittance may also refer specifically to money transferred by migrant workers back to their home country.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.