Remittance Letter

A A A

DEFINITION

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.

INVESTOPEDIA EXPLAINS

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.


RELATED TERMS
  1. Invoice

    A commercial document that itemizes a transaction between a buyer and a seller. ...
  2. Finance

    The science that describes the management, creation and study of money, banking, ...
  3. Open-End Credit

    A pre-approved loan between a financial institution and borrower that may be ...
  4. Remittance

    The process of sending money to remove an obligation. This is most often done ...
  5. Credit Agreement

    A legal contract in which a bank arranges to loan a customer a certain amount ...
  6. Remittance Float

    The time it takes for a payment to be sent from the remitter (payer) to the ...
  7. Gray Market

    An unofficial market where securities are traded. Gray (or “grey”) market trading ...
  8. Supply Chain Finance

    A set of technology-based business and financing processes that link the various ...
  9. Articles Of Incorporation

    A set of documents filed with a government body to legally document the creation ...
  10. Operating Activities

    A company's typical daily processes that generate income. Operating activities ...
Related Articles
  1. Small Business: Speed Up Receivables ...
    Entrepreneurship

    Small Business: Speed Up Receivables ...

  2. Digging Out Of Personal Debt
    Credit & Loans

    Digging Out Of Personal Debt

  3. What Is A Cash Flow Statement?
    Markets

    What Is A Cash Flow Statement?

  4. Run Your Finances Like A Business
    Entrepreneurship

    Run Your Finances Like A Business

  5. Who are Venture Capitalists?
    Investing

    Who are Venture Capitalists?

  6. Vertical Integration
    Investing Basics

    Vertical Integration

  7. Business Cycle
    Economics

    Business Cycle

  8. Getting Acquainted With Treasury Stock
    Stock Analysis

    Getting Acquainted With Treasury Stock

  9. Weighted Average Cost Of Capital (WACC)
    Investing

    Weighted Average Cost Of Capital (WACC)

  10. What is a monopoly?
    Markets

    What is a monopoly?

comments powered by Disqus
Hot Definitions
  1. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  2. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  3. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
  4. Centralized Market

    A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
  5. Balanced Investment Strategy

    A portfolio allocation and management method aimed at balancing risk and return. Such portfolios are generally divided equally between equities and fixed-income securities.
  6. Negative Carry

    A situation in which the cost of holding a security exceeds the yield earned. A negative carry situation is typically undesirable because it means the investor is losing money. An investor might, however, achieve a positive after-tax yield on a negative carry trade if the investment comes with tax advantages, as might be the case with a bond whose interest payments were nontaxable.
Trading Center