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Definition of 'Remittance Letter'
A document sent by a customer, which is often a financial institution or other type of firm, to a creditor or supplier along with a payment to briefly explain what the payment is for so that the customer's account will be credited properly. Remittance letters are often used when the customer does not have a fully established account with the counter party.
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Investopedia explains 'Remittance Letter'
Many bills that are sent by mail to be paid by check contain remittance slips, a portion of the bill that is perforated so it can be torn off and sent with the customer's payment as a way of identifying the payment. The remittance slip will contain the customer's name, address, account number, balance due, due date and invoice number. The remittance slip, like a remittance letter, ensures that the customer's account is credit properly and the supplier or creditor keeps its books accurate.
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