Who Keeps the Remittance Copy for Their Records?

A remittance copy accompanies a payment, detailing the transaction. Individuals and businesses encounter these slips when settling bills, making purchases, or fulfilling tax obligations. This article clarifies their purpose and identifies which party should maintain them.

Understanding the Remittance Copy

A remittance copy, also known as a remittance stub or advice, is a physical or electronic document detailing a payment. Typically, it is a detachable portion of an invoice, bill, or statement. Its primary function is to help the recipient accurately identify and process the payment. The copy usually includes details like the payer’s account number, invoice number, amount paid, and payment date, streamlining reconciliation.

Distinguishing Payer and Payee Responsibilities

The question of who keeps the remittance copy depends on whether you are the payer or the payee in a transaction. Generally, the payer, the individual or entity making the payment, retains the remittance copy. This portion is often labeled “payer’s copy,” “for your records,” or “remittance advice.” Conversely, the payee, the organization or individual receiving the payment, receives the main part of the bill or a separate remittance stub along with the payment.

This distinction exists because each party has a different need for the document. The payer requires proof that the payment was sent, detailing what was paid and to whom. The payee needs the identifying information on the stub to accurately credit the payment to the correct customer account or invoice.

The Value of Maintaining Your Payment Records

Retaining your remittance copy or other proof of payment is a sound financial practice with multiple benefits. This documentation serves as a fundamental record of your financial transactions, providing verifiable proof of payment should a dispute arise.

These records are also important for tax purposes, allowing you to substantiate deductions or income reported on your tax filings. The Internal Revenue Service (IRS) generally requires taxpayers to keep records supporting income, expenses, and credits for three to seven years, depending on the transaction type. Beyond compliance, maintaining these records aids in budgeting and financial tracking, offering insight into spending patterns and overall financial health. They can also be necessary for warranty activation, service agreements, or future reference concerning recurring payments or account inquiries.