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A single bank credit arrives from a customer with several open invoices, and the accountant cannot tell which invoices it settles or why it is less than the total.
The payment advice lists each invoice, the gross amount, TDS and other deductions and the net paid; matching the UTR to the bank line and the invoice list to the ledger settles the receipt.
Ask customers to send an advice with every payment, store it with the bank line, and record invoice, TDS and deduction per line when booking the receipt.
Receipts allocated to the right invoices on the day they arrive, with TDS and deductions recorded separately.
A payment advice is the note a customer sends after paying you. It lists the invoices covered, the amount for each, any deductions such as TDS, the net amount paid and the bank reference, usually the UTR (Unique Transaction Reference) of the NEFT or RTGS transfer. It is the quickest way to match one lump-sum bank credit to the right invoices.
What does a good payment advice contain?
| Field | Why you need it | If it is missing |
|---|---|---|
| Payer name and GSTIN | Identifies the customer, especially group companies | Match by bank account name in the statement |
| UTR or cheque number | Links the advice to one bank credit | Match by date and amount, then confirm with the customer |
| Payment date | Places the receipt in the right month | Use the bank value date |
| Invoice numbers | Tells you which invoices are settled | Ask the customer; do not guess |
| Gross amount per invoice | Shows the amount before deductions | Take from your invoice copy |
| TDS deducted | Separates tax credit from cash | Check your TDS credit statement later |
| Other deductions and debit note references | Explains short payment | Ask for the debit note |
| Net amount paid | Must equal the bank credit | Do not allocate until it agrees |
A worked example
On 14 October the bank statement shows a credit of ₹2,08,000 from a customer. The customer has five open invoices. Without an advice, you would have to guess which ones are paid.
The payment advice says:
| Invoice | Gross | TDS | Net |
|---|---|---|---|
| INV-1041 | ₹1,18,000 | ₹5,000 | ₹1,13,000 |
| INV-1047 | ₹1,00,000 | ₹5,000 | ₹95,000 |
| Total | ₹2,18,000 | ₹10,000 | ₹2,08,000 |
Check: ₹1,18,000 + ₹1,00,000 = ₹2,18,000. Then ₹2,18,000 − ₹10,000 = ₹2,08,000, which equals the bank credit.
You book: bank ₹2,08,000 and TDS receivable ₹10,000, and credit the customer’s ledger ₹2,18,000 against INV-1041 and INV-1047. The other three invoices stay open. Later, you tick the ₹10,000 against your TDS credit statement (Form 26AS, or Form 168 from tax year 2026-27).
What can you do if a customer never sends a payment advice?
- Look at the bank narration. Many NEFT and RTGS credits carry a short remark, often an invoice number or a customer’s own reference.
- Match by amount. Try to find one invoice, or a combination of invoices, that equals the credit, or equals it after typical TDS.
- Check the customer’s portal. Large buyers often publish payment details on a supplier portal.
- Ask, then record. Email the customer’s accounts team for the invoice list. Until it arrives, book the receipt “on account” against the customer and flag it, rather than allocating it to the oldest invoice by default.
- Fix the habit. Add “please send a payment advice with every payment” to your invoice footer and your customer terms.
Is a payment advice the same as a remittance advice, a receipt or a debit note?
| Document | Who issues it | What it says |
|---|---|---|
| Payment advice (remittance advice) | Payer | ”We paid these invoices, less these deductions” |
| Receipt | Receiver | ”We received this money” |
| Debit note | Customer | ”We are claiming a deduction for this reason” |
| Credit note | Supplier (you) | “We agree to reduce what you owe” |
A payment advice and a remittance advice are the same thing under two names. A receipt goes the other way. A debit note is the customer’s claim; it only becomes final when you agree and issue a credit note.
What to read next
- Why did a customer pay less than the invoice explains deductions other than TDS.
- Partial payment reconciliation in India covers payments that settle only part of an invoice.
- What is cash application describes the wider process of applying receipts to invoices.
- For matching bank receipts to the books, see account reconciliation software India.