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| Re: AP: Remittance Advice [message #186971 is a reply to message #186882] |
Thu, 10 August 2006 06:27  |
David.K.Dickson
Messages: 413
Registered: October 2005
Location: Surrey, England
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A Remittance, in Payables, is a payment that we are sending to a Supplier. An Advice provides information or guidance. Put these together and you get "Information or guidance about a payment".
One Supplier sends you one Invoice and you pay that Invoice in full. There is hardly any need for a Remittance Advice.
However, another Supplier has sent you 200 invoices this month and 180 last month and 240 the month before, and some of these have been approved, some are in dispute, some are waiting for approval by somebody who is off work looking after a sick relative, some were paid last month, and some are not due for payment until next month. Now, if you send a payment for the ones that you are happy with, how does he know which of his Invoices you have paid? If you don't tell them, they might apply the Payment to the wrong Invoices, then both of you will have a nightmare of a job trying to sort it out.
So we send a Remittance Advice to tell the Supplier which Invoices we are paying with this Payment.
 HTH
David.
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