A remittance advice is a short note from a payer to a supplier confirming that a payment has been made and setting out which invoices it covers. It is not a legal requirement in Australia and it is not a receipt — it is a courtesy that exists for one practical reason: when a single bank transfer pays six invoices at once, the deposit in your account is one number with no explanation, and the remittance advice is what tells you which six.
Who sends one, and when?
The payer sends it, at or just after the moment they release the payment. You will see them most from the organisations that pay in batches:
- Government departments and councils, which almost always send one automatically.
- Large corporates with an accounts payable team and a weekly or fortnightly payment run.
- Anyone using accounting software — most packages generate and email a remittance advice as a step in the payment run, so it costs the sender nothing.
A one-person business paying one invoice usually does not bother, and nobody will mind. The moment you start paying several suppliers in one sitting, sending one saves you the email that otherwise arrives asking what the payment was for.
What goes on a remittance advice?
There is no prescribed format, because nothing in Australian law requires the document at all. What makes one useful rather than decorative is whether the person receiving it can match it to their books without asking a question:
| Field | Why it is there |
|---|---|
| Payer name | Whose payment this is. Obvious to the sender, not always to a supplier with two clients at the same parent company. |
| Payment date | When the transfer was released, which is not when it lands. Bank transfers can take a day or more to clear. |
| Payment method and reference | EFT, BPAY or card, plus the reference that will appear on the supplier bank statement so the two can be matched. |
| Invoice number and amount, per line | The reason the document exists. One line per invoice being settled. |
| Deductions applied | Credit notes, retentions or withheld amounts, each with its own line and a reason. |
| Total paid | Must equal the sum of the lines and the figure that hits the bank, or the supplier will ring you. |
The single most valuable line is the invoice number against each amount. A remittance advice that says only "payment of $4,180.00 — thank you" has told the supplier nothing they could not see in their bank feed.
Remittance advice, receipt or invoice?
All three describe the same transaction from different sides, and they are issued at different moments by different people.
| Document | Who issues it | What it says |
|---|---|---|
| Invoice | The supplier, before payment | You owe me this much, for this, by this date. |
| Remittance advice | The payer, at the moment of payment | I have sent this much, and here is which invoices it covers. |
| Receipt | The supplier, after payment | I have received this much from you. |
| Statement of account | The supplier, periodically | Here is everything invoiced, paid and still outstanding over a period. |
The distinction that matters at tax time: a remittance advice is the payer's word that they have sent money. It is not proof the money arrived, and it is not a tax invoice or a receipt. Reconcile it against your bank feed before you treat the invoice as paid.
How to use one to reconcile faster
This is the whole point of the document, and it is worth doing deliberately:
- Match the total to the deposit. If the bank shows $4,180.00 and the advice totals $4,180.00, the rest is bookkeeping rather than detective work.
- Tick off each invoice individually. Mark each one paid for its own amount, not the lump sum against the oldest invoice. Otherwise your ageing report drifts out of shape and you chase an invoice that was settled weeks ago.
- Investigate any short payment before you accept it. A payer that deducts a credit note, a retention, or a disputed line item will usually say so on the advice. If the amount is short and the advice does not explain it, that is the email to send today.
- File it with the invoice. It is a business record explaining a transaction, so it falls under the same five-year retention rule as the rest of your books.
When the payment is short
Three deductions turn up often enough on Australian remittance advices to be worth recognising on sight:
- A credit note applied. The payer is netting off an earlier credit against this invoice. Legitimate, provided you issued the credit — check it against your own credit note record.
- No-ABN withholding. If your invoice did not quote an ABN, the payer is generally required to withhold tax at the top rate and remit it to the ATO. The advice will show it as a deduction. The fix is upstream: put your ABN on every invoice.
- An unexplained rounding or "adjustment" line. Ask. A recurring unexplained deduction is either an error in their system or a term of trade nobody told you about.
Do you need to send them?
Not legally, and not for a single payment against a single invoice. Send one when any of the following is true, because each of them is a case where the recipient genuinely cannot work out what you have paid:
- One transfer covers more than one invoice.
- You are part-paying an invoice, or paying a deposit.
- You have deducted something — a credit, a retention, a withheld amount.
- The payment reference field on your bank transfer is too short to carry the invoice numbers, which it usually is.
An email with the invoice numbers, the amounts and the total is a perfectly good remittance advice. It does not need a template, a logo, or a PDF.
Related reading
- What is an invoice? — the document being paid
- Invoice vs receipt — which one is proof of payment
- How to get paid on time — terms, reminders and the wording that works
- What is a purchase order? — the document that comes first with corporate clients
Frequently asked questions
No. Nothing in Australian law requires a payer to issue one, and no rule prescribes what it must contain. It is a business courtesy that exists because it saves both sides work — the supplier can reconcile without asking, and the payer avoids the follow-up email.
No, and the difference matters. A remittance advice is issued by the payer and says money has been sent. A receipt is issued by the supplier and confirms money was received. A remittance advice is not proof of payment — reconcile it against your bank feed before marking the invoice paid.
No. To claim a GST credit on a purchase over $82.50 including GST you need a valid tax invoice from the supplier. A remittance advice is your own record of paying, not the supplier’s record of supplying, so it does not meet the requirement.
Query it the same day. The usual causes are a payment run that was split across two batches, a credit note the payer applied without telling you, or no-ABN withholding because your invoice did not quote an ABN. All three are easier to resolve while the payment is still fresh in the payer’s system.
Treat them as business records and keep them for five years, alongside the invoices they relate to. They are the evidence of how a lump-sum deposit was allocated, which is exactly the kind of question that comes up in a review long after anyone remembers the detail.
Sources
Record-keeping and no-ABN withholding rules come from the Australian Taxation Office; general invoicing and payment practice from business.gov.au. Confirm the current position at ato.gov.au or with a registered tax agent. Balaana is bookkeeping software, not a tax agent — this article is general information, not personal tax advice.