What is a payment advice note?
A payment advice note is information supplied by a customer or payer explaining which invoices, credit notes or other open items are covered by a payment. It provides the detail needed to allocate the payment and clear the relevant receivables in SAP.
Also known as: payment advice, remittance advice or remittance. Usage varies between organisations and countries.
A payment advice may arrive before, with or after the payment. It can be supplied by email, PDF, spreadsheet, EDI message, customer portal or another agreed format.
What information does a payment advice note contain?
It may include:
- Customer or payer name
- Payment date and amount
- Bank or payment reference
- Invoice and credit-note numbers
- Amount allocated to each item
- Discounts, deductions or short payments
- Currency and company details
The total of the advice should normally agree with the associated payment. Differences or missing references create exceptions that require investigation.
How is a payment advice note used in SAP?
The advice helps the accounts receivable team identify the customer and select the correct open items. Once the advice lines and payment are matched with SAP receivables, the relevant items can be cleared.
Example: A customer pays £75,000 for 42 invoices and sends a PDF listing each invoice and allocated amount. The payment advice provides the line-level detail needed to clear the lump-sum payment accurately.
What makes payment advice processing difficult?
Common problems include:
- Unstructured PDF or email formats
- One payment covering many invoices
- Advice and payment arriving through different channels
- Customer references not matching SAP document numbers
- Deductions without a clear reason
- One remittance covering several customer accounts or company codes
- Missing or incomplete advice
These issues can leave cash unapplied even when the money has already reached the bank.
How can payment advice processing be automated?
Automation can capture advice data, validate the total, match advice lines with open receivables and send exceptions for review.
The BEST Customer Clearing module supports payment-advice processing directly within SAP. It can receive advice information through several channels, match remittance lines with SAP customer items, post configured differences and clear eligible items. It can also allocate a single remittance across multiple customer accounts and company codes.
Frequently asked questions
Is a payment advice note proof of payment?
It explains the intended allocation, but finance teams should still confirm that the payment has been received and identify the related bank or payment posting.
Is payment advice the same as remittance advice?
The terms are often used interchangeably. A single glossary page should cover both rather than creating near-duplicate definitions.
What happens if no payment advice is received?
The payment may need to be identified using bank references, customer history and open-item values. If a reliable match cannot be made, it can remain unapplied or be posted on account pending further information.