You may also be interested in:


New Remittance Data Guidelines Will Help Small Trading Partners

  • By Patti Ritter, CTP
  • Published: 7/19/2018


Accounts receivable (AR) and accounts payable (AP) practitioners from large companies know firsthand that many of their smaller trading partners have difficulties sending and receiving electronic payments and related information.

Now, the Federal Reserve’s Business Payments Coalition has convened a workgroup of subject matter experts to address these problems.

The Simple Remittance Requirements paper, published in May 2018, defines a minimal, viable set of remittance data that small and medium businesses (SMBs) need for cash application and reconciliation. This resource will help businesses address the remittance data needs of SMBs. AP and AR practitioners can leverage Simple Remittance Requirements when they onboard smaller trading partners. It is also intended to be a useful reference for payment service providers and accounting software companies. Ideally, all accounting packages will support the remittance data categories defined in the paper. The workgroup also noted inconsistencies in terminology and defined major terms to promote clarity.


In general, accounting software geared toward small businesses is less complex and houses less data than major enterprise resource planning (ERP) systems. Additionally, there is a great deal of variability in the capabilities of accounting software used by small businesses. Payments sent by small business accounting software often are accompanied by very limited remittance data— information on the purpose of the payment.

On the receiving side, small businesses, like their larger trading partners, require specific information to apply and reconcile incoming payments to invoices. But currently many small businesses simply are not getting (or are unable to access) the needed remittance information with electronic payments. As a result, they struggle to apply and reconcile payments they receive.

Data elements described in Simple Remittance Requirements are needed regardless of the payment type used. Three levels of data elements are defined, graduated from simple to more complex.


The first level defines the four minimum data elements that would be needed in most cases to apply a payment. The basic data is simply the invoice number, invoice date, account number and amount paid.

Level 1 tips

Accounts Payable

Make sure to send at least these elements with a payment.

Accounts Receivable

Recognize that this data may be all that is available for a small business to send with a payment, and request that it be sent.


The second level adds additional information, including discounts, adjustments and additional reference information.

Level 2 tips

Accounts Payable

The addition of discounts, adjustments and other reference information is valuable and should be sent when available.

Accounts Receivable

Request that discounts, adjustments and other reference information, if available, be sent along with the basic information.

The third level
is the more comprehensive EPN STP 820 transaction set, a simplified Electronic Data Interchange (EDI) standard developed by the Electronic Payments Network. NACHA’s standard Corporate Trade Exchange (CTX) file format for Automated Clearinghouse (ACH) transactions accommodates STP 820. The STP 820 data would generally be the most extensive EDI-type data readily available to SMBs.

Level 3 tips

Accounts Payable

If you use EDI, follow the STP 820 transaction set. The resource explains how to map the data elements.

Accounts Receivable

If you receive EDI data in remittances, accommodate the STP 820 specification.

In conclusion, addressing payment remittance details is an important step in helping SMBs implement electronic payments on both the sending and receiving sides. Enabling SMBs to move away from checks and adopt electronic payments is beneficial for everybody in the supply chain.

Download a free copy of Simple Remittance Requirements for more information and additional details on the data elements outlined above.

The Business Payments Coalition will use this foundational work product in its ongoing efforts to promote adoption of electronic payments and remittance exchanges. Participation in the Coalition is free and open to any individual or organization interested in its goal of making B2B payments more efficient across the end-to-end process. Visit the Coalition’s website to learn more and to join.

Patti Ritter, CTP, is Senior Payments Consultant for the Payments, Standards and Outreach Group of the Federal Reserve Bank of Minneapolis.

Optimize your cash flow.

Our treasury management and payment services can help you manage cash flow, control risk and become more efficient. Member FDIC.

Let’s get started.

Copyright © 2021 Association for Financial Professionals, Inc.
All rights reserved.