Streamline Payment Communications: The Art of Remittance Emails

A remittance email, also called remittance advice, is a written communication between a customer and a supplier with payment details that assure and notify the supplier that the business has paid its invoice.

Remittance advice works the same way as cash register receipts. When a customer purchases a product, both parties get a receipt, acting as documentation of financial transactions.

This document can either be a business email or a letter, but most companies expect an email because a letter takes time to send. Still, you might receive or send remittance advice slips in the mail as proof of payment.

Payment remittance ensures suppliers' invoices have been paid correctly and on time. When your supplier sends an invoice, they provide details like the invoice number, payment date, the amount due, the date the invoice was sent, and items or services purchased. This invoice is designed to act as a guide to help your accounts payable team understand when bills are due and who they're paid to.

Once an invoice is paid, a supplier will receive a remittance from their customer. Unfortunately, not every business uses this practice even though both parties prefer it because it provides them with documentation and confirmation that a payment has been made, the payment amount, and where the money was deposited or sent.

Since payment processing typically takes time, a remittance ensures suppliers that their invoices will be paid on time. Many businesses use net 30 terms, meaning the company has 30 days to pay the invoice. Sending a remittance email on day 29 ensures the supplier that their invoice will be paid by the specified due date, preventing potential payment issues down the line.

Remittance emails also ensure both parties have written documentation of the payment being made. This way, suppliers who get paid using ACH or wire transfer can't claim they never received payment.

Key components of a remittance advice note

Remittance emails are not legally required, but they're beneficial for both parties and act as a courtesy to improve record-keeping on both ends. Creating a remittance email takes little time, and you can use a template for every supplier you pay.

In addition, many payment processing and accounting apps for businesses integrate with email provider apps and allow you to automatically generate remittance emails as soon as an invoice is paid.

Most remittance emails mirror the information contained in the invoice, including the pricing amount, sales tax, vendor name and address, payment type, and so forth. Each remittance email you send should include the following components:

Clear subject line and sender information

Since remittance emails are designed to notify your supplier that their invoice has been paid, it's always best to keep it simple. You might include the words "invoice," "payment," and your company name to make it easier to find if they ever need to review the information again.

In some cases, your suppliers may not even open the email, and the subject line is enough to inform them that they've been paid. Then, if there's a problem with the invoice amount, they can refer to the email to help resolve the issue.

Invoice details and payment information

The email design for remittance advice slips doesn't have to be complicated. Instead, it should invoice the same information provided on the invoice and payment information, like when the payment was made and where to.

It can list important information like your supplier's bank account number or the type of payment made. The most important part of this email is the invoice amount, which should be the same as the amount listed on the original invoice.

Thank-you message and appreciation

Remittance emails likely won't make or break your relationship with a supplier, but it does serve as a courtesy they'll appreciate. A quick thank-you message and show of appreciation at the end of your remittance email can go a long way in making suppliers feel like your business values them.

Contact information and customer support details

The final piece of information you should share in the remittance email is your contact information and customer support details. Usually, this will be the accounts payable email address or more personal contact information for your accounts payable team members.

If you only have one person managing these accounts and paying invoices, being more personal can go a long way because it will ensure any payment issues are resolved timely.

Since remittance emails are designed to document payment, they're helpful if there are any discrepancies. People make mistakes, so someone may input a wrong number into the accounting system, generating an incorrect payment. When these mistakes happen, it helps to give suppliers contact information to help them resolve the issue.

With this information, they can contact your business headquarters to track down the right person within a specific department, which can be frustrating.

Your suppliers want to be paid correctly and on time, but most are understanding of mistakes. If you don't make it easy to have those mistakes remedied, it can affect your relationship with these other companies.

Most businesses have a lot of suppliers they work with. For instance, a marketing agency may work with other agencies and freelancers, while a product-based business may order office equipment, products, and services from various other companies. The remittance advice provides both parties with the notification of online payments and can be a crucial part of the invoicing process.

Unfortunately, remittance slips can also be timely. The more parties you pay, the more time they'll take. Streamlining your remittance emails can make the process faster while ensuring you reap all the benefits of sending them in the first place. Here's why you should aim to make your remittance process more efficient:

Enhances professionalism and brand image

Remittance advice makes your business appear more professional. Suppliers expect to be paid on time no matter what. Small businesses that send remittance advice slips can assure their suppliers that they're someone who pays their invoices on time, making valuable partners more likely to work with them in the future.

Increases payment processing efficiency

Streamlining your remittance advice process can improve payment processing efficiency. With automation, you can automatically send remittance advice email messages to suppliers as soon as their invoices are paid. All you need is accounting software that allows you to generate these emails based on information in the original invoice.

Reduces customer confusion and inquiries

When a supplier sends you an invoice, you're the customer. That can be difficult to think about because you have customers of your own. Remittance emails reduce customer and client confusion by ensuring invoices are paid accurately and on time.

Then, if there is an issue with payment, one party can reach out to another using the remittance as proof of payment.

Improves cash flow and accounts payable management

A streamlined remittance advice notification process can improve financial visibility for both companies and make accounts payable processes more organized. Remittance emails offer visibility into payment statuses. If you're unsure your business has paid an invoice, you can check for remittance emails before duplicating the transaction.

These letters also make it easier to reconcile payments quickly, leading to better financial management overall.

A remittance email should be simple. Most of your suppliers mainly want to see the invoice details to confirm they'll be receiving EFT payments promptly and in accordance with your contract. However, your emails are still communications, so they should be branded and professional.

Simple and professional email layout

A simple and professional email layout should allow for all the necessary information to be relayed from the invoice. You don't have to add fancy design elements, but you should ensure the information is easy to read and understand.

Personalization and customization

Adding personalization in the form of the supplier's business name and contact details can make the email more effective. However, these are not marketing communications. Instead, they should quickly relay the necessary invoice with basic branding that helps the receiver understand where it came from.

Include contact emails

Remittance emails don't need a call-to-action (CTA) like a marketing message. Instead, you should provide contact information for your accounts payable team in case of payment issues.

Mobile-friendly design

Most business owners are busy, so they're not always in the office or in front of their computers. Making mobile-friendly remittance advice slips ensures your supplier can open and read the information in the email to ensure they've been paid on time.

Streamlining remittance emails with automation

Remittance emails aren't required, but they are a nice courtesy you can provide suppliers, ensuring them you're paying their invoices on time and providing them with the necessary contact information they need in case they experience payment issues.

With Mailchimp, a marketing automation tool, you can optimize remittance emails using automation to improve your accounts payable workflow. Integrate with your CRM or sales software to seamlessly synchronize data across systems and ensure email deliverability. Sign up for Mailchimp today.