Accounting
Financial Management
Remittance Advice: What It Must Include, a Template, and How AR Uses It to Apply Cash
Last updated: October 16, 2026 · Independent guide · We do not sell rankings or coverage.
A remittance advice is the notice a customer’s accounts payable team sends to a supplier to say which invoices a payment covers, how much was paid on each one, and why any line was paid short. It is not proof that money has moved: the payment travels separately as an ACH, wire, check or card transaction. For the supplier’s AR team, the remittance advice is the document that turns a bank deposit into closed invoices, so a complete one should identify the payer, the payment and every invoice, credit and deduction behind the total.
How to use this template
If you work in AP, fill in the header once per payment and add one line per invoice, credit memo or deduction. The net amounts on the lines must add up to the payment amount, to the cent. Send it the day the payment is released.
If you work in AR, send the layout to customers who pay without detail, and print your remittance email address on every invoice. The sample values are an illustration, not a real transaction.
Remittance advice template
Part 1: Header and payment details
| Field | Sample entry (illustration) | Required? |
|---|---|---|
| Document title and date issued | Remittance Advice, October 15, 2026 | Yes |
| Payer legal name and remitting entity | Northfield Distribution LLC (paying for Northfield West) | Yes |
| Your customer account number with the supplier | C-20417 | Yes |
| Payee legal name and supplier ID in the payer’s system | Harbor Packaging Inc., vendor V-0882 | Yes |
| Payment method | ACH credit (CCD+) | Yes |
| Payment reference | Payment no. 558120; ACH trace number, check number or wire reference | Yes |
| Payment date and expected settlement date | Released October 15, 2026; settles October 16, 2026 | Yes |
| Payment amount and currency | $14,560.00 USD | Yes |
| Receiving bank account (last 4 digits only) | Account ending 4471 | Recommended |
| AP contact for questions | [email protected], (555) 010-2290 | Yes |
| Exchange rate and both amounts (cross-border only) | Not applicable | If foreign currency |
Part 2: Invoice lines, credits and deductions
| Invoice no. and PO no. | Invoice date and gross amount | Discount, credit or deduction (code and reason) | Net amount paid |
|---|---|---|---|
| INV-10481 / PO 77310 | September 18, 2026 / $6,200.00 | −$124.00, 2% terms discount (2/10 net 30) | $6,076.00 |
| INV-10495 / PO 77342 | September 24, 2026 / $5,000.00 | −$300.00, debit memo DM-2207, 12 cases damaged on arrival | $4,700.00 |
| INV-10502 / PO 77365 | September 30, 2026 / $3,900.00 | −$116.00, your credit memo CM-0318 applied | $3,784.00 |
| Totals | $15,100.00 | −$540.00 | $14,560.00 |
Plain-text version for an email body
A plain-text layout with one invoice per line is easier for a shared inbox or a capture tool to process than an image.
Subject: Remittance advice | Northfield Distribution LLC | Payment 558120 | $14,560.00 Payee: Harbor Packaging Inc. (our vendor ID V-0882) Payer: Northfield Distribution LLC (your customer no. C-20417) Method: ACH credit (CCD+), trace no. 123456780001234 Released: October 15, 2026 Settles: October 16, 2026 Amount: $14,560.00 USD Invoice PO Inv. date Gross Adjustment Paid INV-10481 77310 09/18/2026 6,200.00 -124.00 terms discount 6,076.00 INV-10495 77342 09/24/2026 5,000.00 -300.00 DM-2207 damaged 4,700.00 INV-10502 77365 09/30/2026 3,900.00 -116.00 CM-0318 applied 3,784.00 TOTAL 15,100.00 -540.00 14,560.00 Questions: [email protected], (555) 010-2290
Use the trace number from your payment file in place of the sample.
Walking through each part of the template
Payer and payee identifiers
Give both names and both account numbers. The supplier’s AR team searches by its own customer number, while your AP team searches by its vendor ID, so including both saves a round of emails. If a parent company pays for subsidiaries, name the entity whose invoices are being paid, or the receipt may land on the wrong customer account.
Payment reference and dates
The payment reference is how AR ties the remittance to the bank deposit. Use the ACH trace number, check number or wire reference that will appear on the supplier’s bank statement, not only your internal payment number. State the settlement date as well as the release date.
Invoice lines
Quote the invoice number exactly as the supplier printed it, including prefixes and leading zeros. Add the PO number as a second key, since it helps AR when an invoice number was mistyped. The X12 standard treats this level of detail as the core of cash application: the RMR segment exists “to specify the accounts receivable open item(s) to be included in the cash application” (Stedi X12 004010 RMR reference, no date shown; Stedi sells EDI software).
Discounts, credits and deductions
Every difference between the gross and net amount needs its own line text: the amount, a reason and a document reference. A terms discount should name the terms. A deduction should cite your debit memo or claim number. A credit should cite the supplier’s credit memo number so AR can close it at the same time. A short pay with no reason is the item most likely to end up parked as unapplied cash.
Totals and contact
The net column must equal the payment amount. Include a named mailbox or phone number so AR can resolve a question in one exchange.
Remittance formats: email, check stub, ACH addenda and EDI 820
| Format | How much detail it carries | Where AR finds it | Best for |
|---|---|---|---|
| Email or PDF | Unlimited lines; layout varies by payer | AR inbox, often separate from the deposit | Most B2B ACH and wire payers |
| Check stub or tear-off slip | Limited by paper space | Mailroom or bank lockbox scan | Check payers |
| ACH CCD+ addenda | One addenda record, 80-character field | Bank file or online banking, if the bank passes it on | One invoice or account per payment |
| ACH CTX addenda | Up to 9,999 addenda records, a full X12 message | Bank file, usually needs translation | Large multi-invoice payments |
| EDI 820 | Many invoices, with adjustment codes | EDI provider mailbox | Retailers and EDI trading partners |
| Customer AP portal | Varies by portal | Supplier logs in and downloads | Large retailers and enterprises |
ACH CCD+ and CTX addenda
Nacha’s developer guide says a CCD entry “can contain a single addenda record to relay payment-related information,” with an 80-character Payment Related Information field, while a CTX entry “supports up to 9,999 addenda records” and can carry “a full ANSI ASC X12 message” (Nacha ACH Guide for Developers, no date shown). Nacha also notes that the addenda may or may not be shown to the recipient, depending on the bank’s capabilities and how the recipient accesses its account. If customers say they send addenda and you never see it, ask your bank to include it in your daily file.
Payers usually fill the 80 characters with an X12 RMR segment. Pitney Bowes asks customers paying by CCD+ or CTX to format the addenda as RMR*IV*123456789**9999.99/, with its account number and the amount to apply (Pitney Bowes CCD+ and CTX addenda guide, no date shown). Alabama Power uses a backslash as the terminator and allows only one of its accounts per CCD+ payment (Alabama Power CCD+ format guide, no date shown). In practice, CCD+ fits one invoice per payment; the three-invoice illustration above needs CTX, an EDI 820 or an email.
EDI 820
The X12 820 “can be used to make a payment, send a remittance advice, or make a payment and send a remittance advice” (Stedi X12 004010 820 reference, no date shown). Each RMR line carries the reference qualifier, invoice number, amount paid, invoice amount and discount. ADX segments carry adjustments with a reason code, such as 04 “Item Not Accepted – Damaged” or CM “Covered by Credit Memo” (Stedi, element 426 code list, no date shown). Our illustration as an 820 detail section:
RMR*IV*INV-10481**6076*6200*124~ RMR*IV*INV-10495**4700*5000~ ADX*-300*04~ RMR*IV*INV-10502**3784*3900~ ADX*-116*CM~
Treat an 820 as information until the money arrives. Orderful, an EDI vendor, says the 820 “does not transfer funds” and is “not a guarantee of payment” (Orderful Help Center, February 27, 2026). Our guide to the EDI 820 remittance advice covers reassociation and retailer deduction codes in detail.
Customer portals
Some large buyers publish remittance only in their own systems. Walmart’s US EFT form offers Retail Link, EDI 820 or email notification, and states that “once a supplier is set up for EFT, Walmart will no longer send a hard copy remittance advice” (Walmart US EFT form, no date shown).
How AR applies cash when the remittance is missing
When a deposit arrives with no usable detail, work through these steps in order before you post anything to an unapplied account:
- Check the bank detail. Pull the full deposit record, including any CCD+ or CTX addenda, the originator name and the trace number.
- Search the channels. Look in the AR inbox, the customer’s AP portal and your EDI mailbox for remittance with the same date and amount.
- Match by amount. Look for one open invoice, or a combination of the customer’s oldest open invoices, that equals the payment. Then test combinations that include the customer’s known discount terms.
- Ask the payer. Email the customer’s AP contact with the payment date, amount and trace number and request the remittance in the template format above.
- Park it visibly. If you still cannot match it, post the receipt on account to the identified customer, or to an unidentified cash account if you do not know who paid, and assign an owner and a follow-up date.
Do not apply oldest-invoice-first for customers who dispute invoices, because a wrong guess closes the disputed invoice. Our guide to unapplied cash covers how to age and clear these balances, including short pays and duplicate payments.
How AP systems send remittance advice automatically
Most accounting systems can email a remittance advice when a payment is released or posted, provided the vendor record holds a current remittance email address.
- Microsoft Dynamics 365 Business Central emails remittance advice in bulk from the payment journal (Related > Payments > Send Remittance Advice) or after posting from Vendor Ledger Entries (Actions > Functions > Send Remittance Advice), using document sending profiles. Microsoft lists it for the US, Canada, the UK, Australia, New Zealand and South Africa (Microsoft Learn, May 2, 2025).
- Sage Intacct sends a vendor payment notification automatically once a payment posts to the general ledger, but only for vendors with notifications enabled. The email goes to the Pay-to contact and can include bill numbers, bill dates, discounts, credits and the payment amount, as a PDF, in the email body or both (Sage Intacct Help, last modified October 8, 2026).
- Oracle NetSuite documents two routes. The Payment Automation SuiteApp, from version 5.0, sends email remittance notifications for ACH and check payments and can resend them (Oracle NetSuite Help, no date shown). Under Intelligent Payment Automation, BILL emails the vendor after the payment is processed. Oracle notes that discounts applied in NetSuite do not appear on that remittance, which a supplier’s AR team will see as an unexplained short pay (Oracle NetSuite Help, no date shown).
Before you rely on any of these, send a test payment to an internal vendor record and check that every invoice, credit and discount appears on the output.
Common mistakes
- Sending the payment number but not the bank reference. AR sees the trace or check number, not your internal payment ID.
- Netting credits and deductions into one figure. A single “less adjustments $540” line forces AR to ask what each part was.
- Reformatting invoice numbers. Dropping a prefix or leading zero breaks automated matching on the supplier’s side.
- Using images or scanned PDFs. Capture tools read text far more reliably than images.
- Sending to a personal mailbox. Use the supplier’s published remittance address.
- Totals that do not tie. If the net lines do not equal the payment amount, AR cannot close the deposit.
When to move from a spreadsheet to software
A spreadsheet template and a shared inbox work while you receive a manageable number of payments and most arrive with remittance attached. Consider software when remittance regularly arrives separately from the money, or when your team re-keys portal and EDI remittance.
Start with your ERP’s own bank matching, then look at dedicated cash application platforms, which add remittance capture. HighRadius says it extracts remittance from email bodies, attachments in PDF, Word and Excel, and AP portals (HighRadius, last modified October 1, 2026), and from RMR and ADX segments in EDI 820 and 823 files (HighRadius, last modified September 3, 2026). Billtrust describes confidence-score matching for “decoupled remittance data” with an adjustable review threshold (Billtrust, modified August 28, 2026). Both are vendor claims, and neither vendor publishes pricing. Our guide to cash application software compares these and other options.
How we researched this
We read the pages ranking for “remittance advice” in October 2026, including BILL, Volopay, Corpay and Shopify. None gives a copyable template with line-level deductions, the CCD+ addenda format, or the AR steps for missing remittance. We checked Nacha’s ACH developer guide, the X12 820 and RMR definitions, published addenda formats from Pitney Bowes and Alabama Power, Walmart’s EFT form, and vendor documentation from Microsoft, Sage, Oracle NetSuite, Orderful, HighRadius and Billtrust. All names and amounts in the template are illustrations. No vendor paid for inclusion.
Related guides
- Payment Run: How AP Teams Select, Approve and Pay Vendors
- Vendor Statement Reconciliation: Step-by-Step AP Process
- Positive Pay: How It Stops Check Fraud (2026)
Frequently asked questions
Is a remittance advice the same as proof of payment?
No. A remittance advice says what a payment is for, while proof of payment comes from the bank, such as a settled ACH or a cleared check. AR should confirm the deposit on the bank statement before applying cash from a remittance advice or an EDI 820.
Is a remittance advice legally required?
BILL, which sells AP software, says there are generally no official requirements to send a remittance advice, although a company can make one a requirement in its payment terms (BILL Learning Center, no date shown). Healthcare is different: claim payments use HIPAA standard transactions, which this guide does not cover.
What is the difference between CCD+ and CTX remittance?
A CCD+ payment carries one addenda record with an 80-character field, which is enough for one invoice reference. A CTX payment can carry up to 9,999 addenda records and a full X12 remittance, so it suits payments covering many invoices.
What should AR do if a customer never sends remittance?
Check the bank addenda, the AR inbox and the customer’s AP portal, then try to match by amount. If that fails, post the payment on account to the customer, ask its AP team for the detail, and track the item until it is applied.
Can my ERP send remittance advice automatically?
Many systems can. Business Central, Sage Intacct and NetSuite each document a way to email remittance to vendors when payments are made. Test that the output shows credits and discounts.
Sources
- Nacha, ACH Guide for Developers: ACH File Details, no date shown
- BILL Learning Center, What is remittance advice?, no date shown (sells AP software)
- Stedi, X12 004010 820 Payment Order/Remittance Advice, no date shown (EDI vendor)
- Stedi, X12 004010 RMR segment, no date shown (EDI vendor)
- Stedi, X12 004010 element 426 Adjustment Reason Code, no date shown (EDI vendor)
- Pitney Bowes, How to Properly Format Addenda of ACH CCD+/CTX Payments, no date shown
- Alabama Power, CCD+ payment format, no date shown
- Walmart, US EFT form, no date shown
- Orderful Help Center, 820 Payment Order/Remittance Advice, February 27, 2026 (EDI vendor)
- Microsoft Learn, Send Remittance Advice (Business Central), May 2, 2025
- Sage Intacct Help, About vendor payment notifications, last modified October 8, 2026
- Oracle NetSuite Help, Remittance Notifications Using Advanced PDF/HTML Templates, no date shown
- Oracle NetSuite Help, Payment Remittance (Intelligent Payment Automation), no date shown
- HighRadius, Cash Application Automation, last modified October 1, 2026 (vendor sells this product)
- HighRadius, EDI Remittance Capture, last modified September 3, 2026 (vendor sells this product)
- Billtrust, Cash Application, modified August 28, 2026 (vendor sells this product)
Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
