Remittance Letter

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.

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.



comments powered by Disqus
Hot Definitions
  1. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares.
  2. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by additional investment would not warrant the expense. A harvest strategy is employed when a line of business is considered to be a cash cow, meaning that the brand is mature and is unlikely to grow if more investment is added.
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better.
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes.
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes.
  6. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer to government spending rather than business or individual spending. When referring to accrued federal government deficits, the term "national debt” is used.
Trading Center