Remittance advice,
and the payment run behind it.

A remittance advice is a note a customer sends a supplier to say a payment has been made and which invoices it covers. It lists each invoice and credit note, the amount paid against each, any deductions, the total and the payment date. It is not a legal requirement in the UK, but without one a supplier cannot tell which invoices a single bank transfer has settled.

What is a remittance advice?

When a business pays a supplier by bank transfer, the supplier sees one amount and a short reference on the statement. If that payment covers six invoices and a credit note, the supplier has no way to allocate it without being told.

The remittance advice tells them. It is sent by the payer, usually by email, on or just after the day the payment leaves. The supplier’s accounts team uses it to mark the right invoices as paid and to spot anything short-paid.

It goes by several names: remittance, remittance slip, payment advice or Bacs remittance advice. They mean the same document, and Bacs is used loosely for any bank transfer.

What goes on a remittance advice

There is no prescribed format. A remittance advice a supplier can actually use carries:

• The payer’s name and the supplier’s name, with the supplier’s account reference if there is one.
• The payment date and method, such as bank transfer, and the reference that will appear on the supplier’s statement.
• Every invoice paid, by invoice number and date, with the amount paid against each.
• Every credit note taken, by number, so the supplier can match it off.
• Any deduction and the reason for it, such as a short delivery, a disputed line, an early payment discount or a CIS deduction.
• The total paid, which must agree with the amount that reaches the bank.
• A contact for queries about the payment.

The deductions line saves the most time. A short payment with no reason produces a phone call; a short payment that names the disputed line produces a credit note.

Is a remittance advice a legal requirement?

No. Nothing in UK law requires a business to send a remittance advice for an ordinary supplier payment. Some contracts and supplier account terms ask for one, and most suppliers expect one.

The Construction Industry Scheme is different. A contractor who makes a CIS deduction from a subcontractor’s payment must give them a payment and deduction statement within 14 days of the end of that tax month. For the tax month ending 5 June, that is by 19 June. The statement shows the gross payment and the tax deducted. It is a separate document from a remittance advice, though both are often sent together.

Remittance advice compared with other documents

A remittance advice is often confused with the documents either side of it:

Two of those matter in construction. A payment notice under the Construction Act comes before the payment and sets out the sum the payer considers due and the basis on which it was calculated. A remittance advice comes after and records what was paid. Sending a remittance advice does not stand in for a payment notice or a pay less notice. Pay less notices covers those deadlines.

A remittance advice is not a VAT invoice either. Under self-billing, the customer raises the invoice on the supplier’s behalf, and that self-billed invoice is the VAT document.

An invoice says what is owed. A remittance advice says what was paid. The difference between them is the next phone call.

Where remittance advice comes from: the payment run

Most businesses do not pay suppliers one invoice at a time. They pay in a payment run: a batch of approved invoices paid together, weekly, fortnightly or monthly. A remittance advice for each supplier in the batch is produced by the run.

A payment run that holds up has five steps:

• Select what is due. Approved invoices falling due before the next run, plus any with an early payment discount worth taking.
• Check what is held. Disputed invoices, short deliveries and suppliers on hold stay out, with the reason recorded.
• Approve the run. A named person, usually a director or finance manager, approves the batch and its total before any money moves.
• Pay it. The payments go from the bank, by file or through the banking portal.
• Remit. Each supplier is sent a remittance advice for its share of the run.

Run by hand, this is a spreadsheet, an email to a director and an afternoon of remittances typed one by one. The commonest failure is an invoice approved after the spreadsheet was built, which misses the run and leaves the supplier waiting another week.

The Commercial Payments Bill passed the House of Lords on 20 October 2026 and is now before the House of Commons. It would cap the final date for payment under a construction contract at 60 days after the due date. What the Bill would change explains what that means for payment terms.

Remittance advice and payment fraud

Remittance advice is a favourite cover for fraud, in two directions.

Fake remittance emails. An email that claims to be a remittance advice from a customer, with a link or attachment, is a common way to deliver malware or harvest a password. Accounts teams open remittances all day, which is exactly why the disguise works. A remittance advice from a genuine customer should match a payment that actually arrives.

Changed bank details. The more expensive fraud runs the other way. An email that appears to come from a regular supplier says their bank details have changed, and the next payment run pays a fraudster. Confirmation of Payee helps: when a payee is set up or amended, the bank checks the name entered against the name on the receiving account. A match is not proof the request is genuine.

The control that works is procedural. Bank details are changed only through a route the fraudster cannot use. The change is confirmed with the supplier on a number already held, and approved by a second person before the next run.

Sending remittance advice automatically

Typing remittances is the last manual job in a payment run, and the first to be skipped when the run is late. Accounts software that holds the run can produce and email them itself, because it already knows which invoices, credit notes and deductions each payment covers.

What to look for: the remittance lists every invoice and credit note and names each deduction. It goes out when the run is paid, not when somebody remembers, and stays on the supplier record for the next query.

This is general guidance rather than legal, tax or accounting advice. Check CIS duties against HMRC’s own guidance for your circumstances.