DEFINITION of 'Remittance Float'

The time it takes for a payment to be sent from the remitter (payer) to the recipient and become liquid again. This term applies to all forms of payment, whether it's a check sent through the mail, an electronic payment or a wire transfer. Most of the remittance float is made up of the transit or mail time.

Sometimes referred to as a "mail float".


BREAKING DOWN 'Remittance Float'

Remittance is another word for a debt owed. Managing the remittance float is a major treasury concern for both small and large businesses; depending on the type of business and the billing schedules there may be large amounts of cash that flow into the business at certain times of the year. Because sizable interest can be earned on these receivables, companies are always looking at ways to limit the remittance float and speed up the time it takes to receive payments, clear checks and invest or use the proceeds.


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RELATED FAQS
  1. How does float affect the nation's money supply?

    Learn how float affects the appearance of the nation's money supply, and receive a brief lesson on how the U.S. government ... Read Answer >>
  2. Why does float usually increase at the beginning of the week?

    Find out more about float and how checking float is created in the American banking system. Learn more about why the Federal ... Read Answer >>
  3. What does floating stock tell traders about a particular stock?

    Learn about what floating stock tells a trader about a particular stock. One commonality of the biggest winners in stock ... Read Answer >>
  4. What months of the year typically have the highest float?

    Learn more about how float occurs within the United States and how it is monitored. Find out why float frequently happens ... Read Answer >>
  5. What is the difference between holdover float and transportation float?

    Find out about float, which may become a thing of the past due to the steady decline of check writing and new services in ... Read Answer >>
  6. In what ways has technology helped to reduce float?

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