A remittance is simply a payment you send to someone else, usually to cover an invoice or bill. Think of it as the money you send to settle up—whether you’re buying supplies or paying a vendor. Remittances complete the transaction and can happen by check, electronic transfer, or cash.
Note: Often, remittances include a little extra—a slip or note saying what the payment is for. This “remittance advice” makes sure your payment is credited to the right place.
Remittances keep cash moving and accounts balanced. They’re proof that payments are made and help businesses track money coming in and out. When a company receives a remittance, it’s a sign that invoices are being paid on time, supporting a healthy cash flow and balanced books.
Staying on top of remittances means better cash flow management. For businesses, missed or late payments from customers can disrupt cash flow and impact everything from payroll to investments.
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