Letter of remittance is basically a document that accompanies checks or drafts that are submitted for collection. It lists the number of checks (items) being sent along with the total dollar amount mentioned in the checks. The checks presented to other banks for payment accompanies a cash letter. A remittance letter is primarily used when the bank does not possess an account at the receiving bank. The three basic pieces of information are contained in any kind of remittance letter. It has the identification of sender with name and mailing address of the debtor. In addition to sender’s contact information, it also mentions the reference of the name and address of the creditor. It also has the details of the amount of the enclosed payment in the body of the letter.
In addition to the above mentioned details, there are other types of information that may be included in the body of the remittance letter. The account number of the debtor can be included along with a reference to any invoice number to which the payment needs to be applied. It also contains the goods or services that were bought by the customer. The due date of invoice can also be mentioned.
The entire format for a remittance letter is kept short and brief. The remittance letter starts with the date of the correspondence and it is followed by the recipient name and mailing address. It should have a simple salutation where the sender can mentioned the details including reason for the payment, and any other data in one or two paragraphs. The information contained in the letter should assist the receiver in applying for the payment effortlessly. In the end of the letter, the standard closing along with the signature of the sender should be followed.