III. Manufacturer Advises Exporter of Impending Completion of Order

Dear Sirs,

The Wire-Drawing Machine you ordered on the 15th May for an overseas customer will be completed in about a fortnight.

We should therefore be glad to receive your packing and marking instructions. Perhaps you would also let us know whether measurements, gross weights and net weights are to be stenciled on the cases.

We understand that you will arrange for the collection of the shipment at our Sheffield Works, and we shall advise you as soon as the machine has been packed.

Yours faithfully,

 

VI. Payment

 

Acknowledging Receipt of Goods and Making Payment — Acknowledging Receipt of Payment

Acknowledging Receipt of Goods and Making Payment

When the buyer receives the goods delivered by the seller, he will examine them carefully; if he finds them to be in order, he will, in many cases, send the seller an acknowledgment of receipt. Should a remittance be made at the same time, an advice to this effect is included in the acknowledgment.

Before payment is effected, the buyer carefully checks the seller's invoice or statement and compares it with his own records. If he discovers any error or discrepancy, he will notify the seller immediately. The matter is then investigated by the latter and, if it is found that the buyer was right, a correction is made.

In settling indebtedness the following means of payment may be used:

1. cash,

2. postal orders and money orders,

3. cheques and bank drafts,

4. bank transfers,

5. bills of exchange and promissory notes,

6. documentary credits.

 

Acknowledging Receipt of Payment

It is not necessary for the seller to acknowledge the buyer's remittance unless the buyer asks for a receipt. To many suppliers, however, such an acknowledgment is a welcome opportunity to build goodwill and to solicit further business.

Errors, misunderstandings and other difficulties in connection with payment have to be called to the buyer's attention. For example, the buyer may have made an error in remitting, he may have misunderstood the terms of payment, or he may have forgotten to mention the number and date of the invoice he is paying.

Specimen letters

I. Acknowledging Receipt of Goods

Dear Sirs,

Today we have received the consignment of which you advised us on the 7th March. We have examined the goods and have found them to be in order.

In payment of your invoice we enclose cheque for £... on the District Bank Ltd. Manchester. Please send us your officialreceipt.

Yours faithfully,

 

Encl.

 

II. Supplier Asks for Details of Invoice Paid

Dear Sirs,

Thank you for your cheque in the amount of £...

Your payment arrived without a remittance advice. We do not know which invoice you are paying, and should appreciate it if you would give us the invoice number and date in order that we may credit your account properly.

Yours faithfully,

 

III. Publisher of Textbooks Corrects Error in Invoice

Dear Mrs Robinson,

Thank you for your letter of February 15 regarding our invoice No. 4668.

Due to an error, you were billed incorrectly. The price of the textbook is $5.20 less 20 % discount.

We are canceling this invoice and you should receive a credit shortly. To rectify our error we are re-billing you at the correct price.

Thank you for bringing this matter to our attention, and we apologize for any inconvenience this mistake may have caused you.

Sincerely yours,

 

VII. Credit Letters

Credit Inquiries and Credit Information

Credit Inquiries

When a new customer asks for credit, the supplier must first find out whether the customer is creditworthy. To this end, he sends credit inquiries (or: status inquiries) to possible sources of information.

The most important credit information sources are:

1. the customer (he may be asked to furnish information about himself, for example, by filling in a credit application form, or by submitting a copy of his latest balance sheet),

2. the customer's trade references (other suppliers whom the customer has given as references),

3. the customer's bank references (the banks named by the customer),

4. other firms known to have done business with the customer,

5. inquiry agencies (US: commercial or mercantile agencies).

It should be noted that banks give information only to other banks. Therefore, a supplier seeking information from his customer's bank can secure this information only through his own bank.

The inquirer must, of course, assure the firm he is writing to that the information given will be treated confidentially and without responsibility on the latter's part.

Credit inquiries often close with an offer to reciprocate favours. Many businessmen feel, however, that this goes without saying.

Letters requesting credit information, and the envelopes, in which they are sent, are marked Confidential, Strictly Confidential, or Private and Confidential.

 

Credit Information

Business firms are under no obligation whatsoever to answer credit inquiries. Usually, however, they are quite willing to co-operate, knowing that they, too, have to ask similar favours from time to time.

In replies to credit inquiries, the name of the person or firm about whom information is given is often omitted; instead, reference is made to the firm in question, the firm mentioned in your letter, the firm about which you inquire, etc.

 

Specimen Letters

I. Credit Inquiry

Private and Confidential

Dear Sirs,

We have been referred to you by the firm mentioned on the enclosed slip and should be glad if you would give us as detailed information as possible regarding their financial status and business reputation. In particular, we should like to know whether, in your opinion, a credit to the extent of approx. £3,000 could be safely granted.

We thank you for your courtesy and assure you that your information will be treated confidentially. For your convenience we enclose a stamped and addressed envelope.

Yours faithfully,

 

Encl.

 

II. Credit Inquiry

ROAD EQUIPMENT COMPANY

116 N. LA SALLE STREET, CHICAGO 1, ILL.

TELEPHONE

RANDOLPH 8-6430

February 3, 20…

John Miles Tractor Company

619 Stonegate Road

Peoria, Ill. 61601

Re: Cooper Construction Company

Springfield, Illinois

Gentlemen:

We understand that you are familiar with the affairs of the above company, from which we have just received a large order.

Will you kindly give us your opinion of the company's financial responsibility, credit standing, and general management. If you are granting accommodations, we should like to know the extent of the accommodation, the amount at present owing you and, if on a secured basis, the nature of the security.

Your reply will be appreciated, and we assure you that any information you may give us will be held in strict confidence. Should the occasion present itself, we shall be very glad to reciprocate the favor.

Yours very truly,

C.F. Cummings

Credit Department

CFCummings:jn

 

III. Favourable Information

Private and Confidential

Dear Sirs,

Messrs. Johnson & Co., about whom you inquire in your letter of 17th March, have done business with us for the past two years. Orders have been comparatively small and payments regular, with a short delay in one case. Our representative reports that the firm is sound and reliable. A credit of £400 would appear to be in order.

This information is given in confidence and without responsibility on our part.

Yours faithfully,

 

IV. Unfavourable Information

Private and Confidential

Gentlemen:

We regret to state, in response to your letter of May 28, that our experience with the firm in question has not been satisfactory.

During the ten months they have had an account with us, we have repeatedly had difficulties in collecting bills. It seems that their financial position is not very strong.

Under these circumstances we would advise you to proceed with caution and, if possible, to do business on cash terms only.

This information is given without any obligation on our part, and we trust that it will be held strictly confidential.

Very truly yours,

 

VIII. Delays in Delivery

Delays in Delivery and Non-Delivery—Missing Consignments