Financial Authorization Letter
We have not heard of the term financial authorization letter, have we? We have not. But we have heard of authorization letter many times. It sounds very technical, because it is. It is a business term. But before we try to understand what financial authorization letter means, let us first try to understand what authorization letter is.
The broader, more general authorization letter is a letter used to authorize someone, usually a person you can trust—a friend or a coworker—to act on your behalf in legal or trivial matters.
There is not really a clear distinction between trivial and legal authorization, but to pave our way to understanding what this kind of letter is all about, let us make some nuances on some forms of authorization letter.
Authorization Letter for Claiming Example
An authorization letter is trivial if it is done between your close friends. If a friend (A) of yours has something to give you, but you could not come for some reasons, you would ask another friend (B), who happens to be a friend of your friend (A), you would send your friend (A) an authorization letter.
But such kind of authorization letter cannot be strictly called legal because it is just a formality letter, and may not be necessary. You give him a letter or not, it would not make any difference because your friend would still allow your other friend to claim the gift on your behalf.
Authorization Letter to Act on Behalf Example
But let us say, in an office setting, you were supposed to claim your salary, let us say, $200 for the following day. But you could not come, so you ask your co-employee to claim the salary on your behalf. But then, the in-charge of giving the salary would not allow it, unless there is an authorization letter from you. What then do you call of that letter? It can not be a trivial authorization letter because this is the kind of authorization that requires professionalism. This is not the kind of authorization that can be dispensable. Not giving a letter is never optional in this case. Unlike in the previous example where you are sure that your friend will allow a third party to claim your gift, this one is not.
Such example in the abovementioned requires legal authorization letter. By legal, it means the letter will be part in the office records or bookkeeping. It can be, for future reference, used as evidence, that you really asked someone to claim you salary, on your behalf—with your authorization. Such is the kind of authorization letter as financial.
Letter of Authorization Example
So what then is financial authorization letter?
We mentioned that an authorization letter is any letter that gives someone the power to claim on someone’s behalf, for whatever purpose. A financial authorization letter, as specific as the word suggests, is an authorization letter about anything that is financial in nature. So, a letter asking someone to do an act such as to claim something on your behalf, perhaps to claim money, to get a check, to have your check encashed, to withdraw money from your account, that is called financial authorization letter. Before going deeper, let us review what authorization letter is in general.
If something to be claimed is not money related, then that is just a normal authorization letter. If you left your book at the park, and you would ask your buddy to claim the book because it so happened he is working there, you would give him a letter to be given to the one in charge at the park, probably who is keeping your book. That is called an authorization letter.
Financial Authorization Letter Example
Another example would be in a school setting. You were supposed to submit your homework but you could not come to school. So you ask someone, your classmate, to have your homework submitted to your teacher. You give the homework along with an authorization letter. The matter is not about money, so that is another idea of what an authorization letter is all about.
Another example would be in car shop setting. You left your car at a car shop for some repair. You could not wait because the repair takes longer than the usual. So you ask someone to get the car for you. But you forget to get the claim stub, or a release ticket, or perhaps an invoice from the car shop. So what you would do is give him an authorization letter, saying that someone, that he will claim your car on your behalf. Is that a financial authorization letter? No, it is an authorization letter. It is not a financial authorization letter because it does not involve financial matters. A car may be expensive and may be used as a collateral, but such is not a financial matter.
Now back to the specific, anything that involves money and the likes such as bank, loan, salary, money withdrawal, all these require financial authorization letter.
Financial Reference Letter Example
Why the Need for Financial Authorization Letter?
There may be cases when you do not need an authorization letter such as when the person you are asking from is very close to you, or a relative of yours. And the item or the matter involved is nothing serious, such as a ball pen or a 1 or 2 dollar amount. That may save you from not writing and sending a letter. But if the amount is a big one, relatively speaking, and especially when there is an involvement of a company, such as borrowing a cash advance from a company, then that may require a financial authorization letter.
This is a requirement, a necessity for the protection of either the two parties. And how does it work?
When asking for someone to claim something on your behalf, you are allowing a third person to be part in the transaction. In the supposed transaction, between you and the institution, the people involved are officially registered. Meaning, if whatever happens, if something sour happens, tracing the problem would not be that difficult because there is a personal record, such as a biodata or a resume, of the people involved in the incident. Also, the act of claiming something is already an expected event. The question of you going to claim something from someone is already in place. If something happens, the two of you will be the first suspects.
Final Authorization Request Form
Now if you introduce another person in the scene, in the claiming of the item, the money, or something from someone, you are not only introducing something but also changing the course of the event, of the supposedly planned event. You are doing something that has not been written in the official record. If something happens, that third party will not be liable of anything. He is anonymous to the company, he is nobody. That is a big problem. The solution is financial authorization letter.
A financial authorization letter makes room for what has been changed or lost. If there was something changed, there was a change of the action not being in conformity with the record. To accommodate or make readjustments of such change, a financial authorization letter must be submitted.
Customer Authorization Example
The presence of a financial authorization letter will solve the issue of the missing or the ghost person in the scene, as well as the action that is not in the official record.
The financial authorization letter will provide details such as the name of the person asked to claimed for the item, the money. The following should be considered when using a financial authorization letter:
An ID card of the person, in place of the actual, real owner, who was asked to claim for the money. The ID card will verify if the person being named in the financial authorization letter is the same as the one in the ID card.
In some cases, an ID of the owner has to be brought along by the person who was given the authority. This will strengthen the proof that there has been an actual meet-up between the two, possibly speaking.
Bank Authorization Letter Example
Financial Authorization Form Example
Other details in the financial authorization letter, aside from the names, would be the date, the address of the people. It would be more convincing if details such as why you are asking someone to claim your item on behalf of you. It would sound polite if you state your condition, whether you are in an accident or attending some important matters.
Also, most importantly, you should mention what item and how much the person authorized will claim.
Authorization Letter Example
Lastly, there should be a clear direction to the person authorized how to claim the item. Asking him to sign when claiming the item is very important as it will verify that he really was the person who claimed the said item. Also, the signature can be used as testimony, a witnessing in the process of claiming the item.
Make a phone call.
If in case, the institution will not accept your financial authorization letter, your last stand would be to call the said institution.
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