A method of settling a debt. It is often used by persons or businesses with a great many debts to settle at any one time. A list of the creditors is given to the bank, together with the amounts due, and the name and address of each creditor's bank. The bank then transfers the amounts due and the debtor then notifies each creditor that the transfer has been made. The obvious advantage of this method is that it saves writing out and signing a great number of cheques, though this saving should be weighed against the charges made by the bank.
|Reference: The Penguin Business Dictionary, 3rd edt.|