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1BUSINESS COMMUNICATIONAND MANAGEMENT
UNITS CONTENTS PAGE NO
I BUSINESS COMMUNICATION 5
II KINDS OF BUSINESS LETTERS 37
III NATURE AND SCOPE OFMANAGEMENT 90
IV ORGANISATION 129
V STAFFING 162
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2PAPER - IV -Main
BUSINESS COMMUNICATION AND MANAGEMENT
UNIT - I
Business Communication - Meaning - Objectives -Effective
Business Letter - Sources of Communication - Layoutof Business
Letter - Kinds of Business Letter.
UNIT - II
Various Types of Business Letter - Letter of Enquiry -Order and
Complaints - Circular - Status Enquiry - CollectionLetter - Bank
Correspondence - Company Correspondence -Correspondence with
Shareholders.
UNIT - III
Nature and Scope of Management - Functions ofManagement -
Scientific Management - Planning - Importanceof Planning -
Forecasting.
UNIT - IV
Organisation - Nature and Importance - Leading - Natureand
Purpose of Directing - Controlling - Co-ordination -Meaning and
Types of Control.
UNIT - V
Nature and Purpose of Staffing - Manpower Planning -Recruitments
- Selection - Placement and Induction, Benefits,Scope, Types and
Methods of Training.
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3BLOCK PLAN (CONTENT)UNIT I BUSINESS COMMUNICATION1:0
Introduction1:1 Meaning1:2 Objectives of communication1:3
Communication Process1:4 Channels or Types of Communication.1:5
Barriers to Communication1:6 Essentials of Effective Business
letter1:7 The Layout and Design of a Business Letter1:8 Kinds of
Business LettersUNIT II KINDS OF BUSINESS LETTERS2:1 Letter of
Inquiry and Reply2:2 Orders-Their Execution and Cancellation2.3
Claim, Complaints and Settlement of Accounts2.4 Circular Letters2:5
Status Inquiries2:6 Collection Letter2:7 Banking Correspondence2:8
Correspondence of a Company SecretaryUNIT III NATURE AND SCOPE OF
MANAGEMENT3:1 Management3:2 Planning3:3 ForecastingUNIT IV
ORGANIZATION4:1 Organization4:2 Leadership4:3 Directing4:4
Controlling4:5 Co ordinationUNIT V STAFFING5:1 Staffing5:2 Manpower
planning5:3 Recruitment5:4 Selection procedure5:5 Placement5:6
Induction5:7 Training
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4BLOCK INTRODUCTION
We are in the block of course Four - BusinessCommunication and
Management. In this block we will discussabout the concept of
Business Communication, Kinds of BusinessLetters, Business
Management, Organisation and Staffing.
In the first unit you are going to learn about
BusinessCommunication, process of communication, types
ofcommunication and barriers to communication.
In the second unit we are going to discuss about the kinds
ofbusiness letters like Letter of Inquiry and Reply,
Orders-TheirExecution and Cancellation,Claim, Complaints and
Settlement ofAccounts, Circular Letters, Status Inquiries,
Collection Letter,Banking Correspondence, Correspondence of a
CompanySecretary.
In the third unit you will get the clear idea about
management,planning and forecasting.
In the fourth unit of this block you are going to explore
aboutorganisation. We deal about directing, controlling and
co-ordination.
In the fifth unit you will acquire the knowledge on the areaof
staffing. This chapter contains recuritment, selection,
placement,induction and training.
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5UNIT I BUSINESS COMMUNICATION
UNIT STRUCTURE
1:0 Introduction
1:1 Meaning
1:2 Objectives of communication
1:3 Communication Process
1:4 Channels or Types of Communication.
1:5 Barriers to Communication
1:6 Essentials of Effective Business letter
1:7 The Layout and Design of a Business Letter
1:8 Kinds of Business Letters
SELF- ASSESSMENT QUESTIONS: I
1:9 Summary
Unit Questions
Recommendations for further readings
Answers of Self-Assessment Questions
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6UNIT - I
BUSINESS COMMUNICATION
1:0 INTRODUCTIONThe word Communication is derived from the
Latin
word communico which means To share. It is the act ofsharing or
imparting a share of anything. In its vital sense, itmeans a
sharing of ideas and feelings in a mood of mutualunderstanding. It
is a two-way process in which a speakermust have a listener to
share the experience.
Communication is the tool with which we exerciseinfluence on
others, bring about changes in the attitudes andviews of our
associates, motivate them and establish andmaintain relations with
them. Without communication therewould not be any interaction
between persons. Hence, therecannot be a Government or society
withoutcommunication.
The ability of communication depends upon theadvancement of the
society he lives. Among human beings,the more civilized and advance
groups have higher com-munication ability than the less advanced
groups. It isfound that about 75% of the effective hours of a man
is beingspent on communication i.e., speaking, writing, listening,
read-ing etc.
1:1 MeaningCommunication is the act of influencing and
inducing
others to interpret an idea in the manner intended by thespeaker
or writer. Communication is an exchange of facts,ideas, opinions or
emotions by two or more persons. It is theprocess by which
information is transmitted betweenindividuals and/or organisations
so that an understanding
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7response results. We shall now see some of the
importantdefinitions given by eminent authorities on the
subject.
DefinitionDefinition of W.H.Newman and C.F.Summer Jr
Communication is a exchange of facts, ideas, opinions oremotions
by two or more persons.
Definition of Fred G.Meyer.According to Fred G.Meyer,
Communication is the
intercourse by words, letters or messages, intercourse
ofthoughts or opinions. It is the act of making ones ideas
andopinions known to others.
1:2 Objectives of communicationCommunication is a process
through which different
persons are connected to each other in such a manner toachieve a
common objective. Without communication, groupactivity is
impossible. It helps the members to co-ordinatewith each other,
exchange their ideas and thereby to makeprogress.
1. Information:One of the important objectives of communication
is
passing or receiving information about a particular fact
orcircumstance. Every organisation whether a small or large,
acomplex or a simple require information which is required tobe
communicated. Top-level management personnel requirecomplete,
accurate and precise information to plan andorganise. Employees
become very efficient and responsibleif they know well about the
various aspects of anenterprise. It can be done either through
spoken or writtenlanguage or by using any other system of signs.
Informationrequired for daily work can be given orally. If large
groupshave to be informed, a meeting may be called.
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8Information that are required for the organisation arenormally
obtained from the sources like old files, personalobservation,
Radio, TV, Cinema, Newspapers, Periodicals,Pamphlets, Government
publications, Chambers ofCommerce, meetings, seminars and
conferences, personalinterviews with people, questionnaire and
trade fairs andexhibitions.
2. Advice:Advice is also a kind of information. It means
opinion
given as to the action to be taken. Advice is normally given toa
person either to influence his opinion or his behaviour. Itmay
prove helpful, but it may also lead to disaster. So to makeadvice
effective, while offering advice, the adviser should keepthe
following points in mind:
1. Advice should be related to aspecific piece ofwork.
2. It should meet the needs of the recipient.
3. It should not make the recipient to feel inferior.
4. The adviser should make the recipient to feel thathe is being
advised for his own betterment.
3. Order:Order is an authoritative communication. Orders are
absolutely necessary for any organisation irrespective of
itsnature and size. It a directive to somebody, normally
asubordinate, to do something, to alter the course of somethinghe
has already done, or not to do something. An order to
beeffective-
1. Should be clear and complete,2. Should be given in a friendly
manner,3. Its execution should be possible.
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94. Suggestion:The term suggestion means proposing something
for
acceptance or rejection. Communication is used to
conveysuggestion or ideas. This is being constantly done in all
humangroups. Someone or the other is making suggestions and
otherreact to them . This happens in any social group like a
family,office, factory, State, Nation etc. Effective
communicationpromotes the acceptance and trial of good
suggestions.Subordinates normally give suggestions. This is
because, theyare the ones who are actually involved in the work and
havea better understanding of the shortcomings and can makeuseful
suggestions for improvements. That is why, in bigconcerns
suggestions are collected at regular intervals bymeans of a
suggestion box. Such suggestions are known asupward
communication.
5. Persuasion:Including, compelling or promoting a person to
act
mostly in a positive way is known as persuasion. Persuasionis an
important objective of communication. Managementtry to persuade
their workers to put in their best effort; sellerspersuade their
customers to buy etc. It takes place throughsome kind of
communication. Persuasion is more easily doneby a person who-enjoys
respect and confidence of thosewhom he wishes to persuade. However,
if persuasion is to beeffective, they must not be conscious of
being persuaded.
6. Education:Education involves imparting instruction,
character
building, enriching mental faculties, giving training to
humanbeings e tc . I t a ims a t widening the knowledge
andimproving skills. It is carried on at various levels
ofmanagement namely, top level, employees level and at thelevel of
outside public. Employees are trained essentially bycommunication.
All education takes place by means ofcommunication.
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7. Warning:Warning is a forceful means of communication. It
may
be given orally or in writing. Very often, we come acrossnotices
like No smoking, Beware of dogs, Danger etc.These are some warnings
or cautions. In offices and factories,higher officials give
warnings to their subordinates, byissue of memos.
8. Motivation:Inspiring the interest in their job in the minds
of the
employees in known as motivation. If the people areadequately
motivated, they will have high morale and this willbe low if the
level of motivation is low. Low morale is thebasic cause for
indiscipline. Motivation determines thebehaviour of a person to a
greater extent. In motivation,employees are motivated in such a
manner to work willinglyand eagerly. A motivated worker does not
need muchsupervision.
9. Counseling:Counseling is done by a man of greater skill
or
knowledge on some specific subject and he offers his
counselwithout any personal interest. Companies, which are
inter-ested in their employees welfare, have centres to counsel
theiremployees. It is very much similar to giving advice.
However,there are some differences between the two also. They
are-
i) Counseling is objective and impersonal,whereas advice is
personal touch.
ii) Counsel is almost professional, whereasadvice is not so,
and
iii). Counsel is eagerly sought, whereas adviceis very often
unwelcome.
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10. Morale Boosting:Morale is the term usually applied to armed
forces
during war time and to sports and athletic teams. It refers
toteam spirit and co-operation of people for a common purpose.Its
importance has been realised by the management onlyrecently. The
management feels that if the morale is high,production would be
higher and on the other hand if it werelow, the production would
also be low. It is already statedthat motivation and morale are
inter-connected and dependanton each other. If the workers are
highly motivated, morale isalso said to be high. On the other hand,
if the degree ofmotivation is low, the morale is also said to be
low.
11. Appreciation:Praising of initiative, good effort and work
by
employees is known as appreciation. It is very useful
forcreating a good attitude. It may be conveyed orally or
inwriting. If given publicity, it will have better effect.
1:3 COMMUNICATION PROCESSCommunication is a process whereby one
person or one
group conveys some information to another person or toanother
social group. Communication is a social process forexchanging
information and establishing understandingbetween two or more
parties. Conceptually, communicationis seen as a two-way process by
which people communicatewith one another. The sender, who creates a
message designedto elicit a specific response from the receiver,
initiatescommunication. The receiver interprets the message
accordingto his own understanding and sends a message back to
thesender. If the purpose of the sender and the response of
thereceiver are inconsistent, the communication process will
fail,and the sender may wish to initiate the process again withsome
modifications to the message. Thus, the nature ofcommunication is
considered as a continuous, inter-personalprocess.
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As shown in the following figure, the sender of thecommunication
starts with and idea to be shared with thereceiver. Using a set of
encoding skills, the sender translatesthe idea into a transmittable
message. Employing encodingskills, the receiver converts the idea
into a feedback messageto the sender. The sender now uses decoding
skills to translatethe feedback and compares that with the original
idea. Thesender determines whether the message was properly
receivedand understood. Often, understanding is not achieved and
thesender must try again. The communication process oftenbreaks
down because the process is replete with barriers
tocommunication.
1:4 CHANNELS OR TYPES OF COMMUNICATION.Types of communication
can be discussed under the
following two broad heads.
1. On the basis of organisational structure:1. Formal
Communication, and2. Informal Communication.
2. On the basis of media used:1. Written Communication, and2.
Oral Communication
1. Organisational StructureOn the basis of organisational
structure,
communication can be further classified into two namely,
1. Formal Communication, and2. Informal Communication
We shall now describe them briefly.1. Formal Communication:
Formal communication takes place via formal channelsof the
organisational structure established by the management.These
channels are deliberately created for regulating thecommunication
flow and to link various parts of the
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organisation. They are helpful for performing functions
likeplanning, decision-making, co-ordination and control. In
aformal communication system, matters with regard to whoshould
communicate, what, when and how to becommunicated and to whom to be
communicated are all clearlydefined. The formal organisation chart
describes the formallines of authority, power, responsibility and
accountabilityof organisational members. All these relationships
involvecommunication. Formal communications are in writing.
Thereare three forms of formal communication namely
1. Downward,2. Upward, and3. Horizontal.
1. Downward Communication: Communication is said to be downward
when it moves
from the top to the bottom. Downward channels are used
forpassing on managerial decisions, plans, policies andprogrammes
to subordinates down the line for theirunderstanding and
implementation. Downwardcommunications are used by the superiors to
convey theirorders, instructions and directions to their
subordinates.In the words of D.Katz and R.L.Kahn, the purpose
ofdownward communication are to-
1. Give job instructions.2. Create an understanding of the work
and
its relations with other tasks.3. Inform about procedures.4. I n
f o r m s u b o r d i n a t e s a b o u t t h e i r
performance.5. I n d o c t r i n a t e t h e w o r k e r s t
o
organisational goals.
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However, downward communication suffers fromcertain drawbacks.
They are..1. It develops an authoritative atmosphere
that might be detrimental to morale.2. A s i n f o r m a t i o n
p a s s e s t h r o u g h t h e
various levels of hierarchy, it might bedistorted,
misinterpreted etc.,
2. Upward Communication:Communication is said to be upward when
it flows from
the subordinates to the top management. Upwardcommunication is
used by subordinates for transmittinginformation, ideas, views and
requests to their superiors onmatters relating to their jobs,
responsibilities etc.,. Upwardcommunications are also used to
convey views, suggestions,grievances and problems of subordinates
to their superiors.It enables the subordinates to communicate to
the superiorsthe progress of the work and response to the work
assigned tothem. Upward communication may be oral or written. It
alsoenables the management to know he extent to which the
sub-ordinates understand the policies and programmes of the
or-ganisation.
3. Horizontal Communication:Communication is horizontal when it
flows betweenindividuals at the same operational level i.e.,.
between twodepartmental heads. The purpose of the
horizontalcommunication is to enable managers and others of the
samerank to interact on important matters, to exchange informa-tion
and co-ordinate their activities without referring allmatters to
the top level management.
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2. Informal CommunicationInformal Communication is free from all
the formalities
of formal communication. It is based on the informalrelationship
among the members of the organisation. Informalcommunication is
usually oral and may be conveyed by asimple gesture, glance, nod or
smile. The informal relationshipthat supplements the formal
organisational relationship isreferred to as the grapevine.
According to H.Koontz andODonnel,
the grapevine, of course, thrives on information notopenly
available to the entire group, whether because it isregarded as
confidential, or because formal lines of com-munication are
inadequate to disperse it, or because it is ofthe kind that would
never be formally disclosed.
Informal communications are made by members of theorganisation
to transfer information both on the matters oftask related and
non-task related. These communications arefree from any trappings
of authority and status differentials.Informal communications often
serve as supplement to formalcommunications. Managers and others
may sometimes passon information informally which they would not
like totransfer formally for strategic and practical reasons.
II. Media Used:
On the basis of media used, communication can beclassified into
four namely
1. Oral communication2. Written Communication3. Non-verbal
Communication and4. Audio-Visual Communication
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1. Oral CommunicationOral communication refers to face to
face
communication. It offers interchange of ideas at the
personnellevel. There can be questions and answers . The sender
andreceiver of the message are in direct contact. If the listener
doesnot understand the message, he can ask for a clarification
orraise questions and get the answers. If matters are to be
conveyedwithin an organisation, oral communication is considered as
thebest as well as the cheapest method of communication.Especially,
it is of vital importance in handling difficult orcomplicated
situations.
Merits of Oral Communication
Merits of oral communication are as follows:1. It is economical
when compared to written
communication.2. It is more flexible and can be effectively
combined with gesture and other expressions.3. It is more
effective on account of direct
contact between the communicator andcommunicatee.
4. It leads to better understanding becauseresponse to the
message can be obtained onthe spot, and doubts, clarifications etc.
Canalso be removed quickly.
5. It is faster and saves time.
Demerits of Oral CommunicationOral communication has certain
demerits. They are:1. It is not suitable in cases where the
message
is long and complicated, when the audienceis large and when
there is no need forinteraction.
2. It does not provide any record for futurereference.
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3. It is time consuming and costly.4. It cannot be used as a
communication media
where people scattered over a wide area.5. It can be irritating
and wasteful when the
persons involved are poor in talking skills.
2. Written Communication
Written communication, on the other hand, is very widein its
scope and covers entire paper work relating to all kinds
oftransactions, agreements, proposals etc,. Infact, the main workof
any office is written communication. Written communicationthough
has a place inside the organisation, it is of paramountimportance
in conveying messages to the external world. Thoughmodern devices
such as telephone etc. have lessened thedependence on writing, it
still serves as the main channel for allthe business transactions.
This is because, a written communi-cation can carry assurance of
transactions, confirm the dealingand form a reliable record for
future reference. Besides, it isthe cheapest method of contacting
the external world. Hence,it saves money as well as time. Moreover,
people place morereliance in pen than in the tongue.
Merits of Written Communication: There are certain obvious
advantages in written
communication.
1. Letters or written communications can be keptas a legal
record.
2. They can be retained for purpose of futurereference.
3. They are formulated more carefully than
oralcommunication.
4. They can save money and time.5. The written communication is
used for all
practical purposes in every organisation.
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Limitations of Written Communication:A written communication,
though has many points to its
credit, is not an unmixed blessing. It too has certain
definitelimitations. It is not suitable under all circumstances.
Thefollowing are the situations in which a written communicationis
unsuitable.1. Complicated Matters:
Complicated or difficult matters cannot be handledthrough
written communication.2. Confidential Matters :
Confidential matters cannot be reduced to writing3. Instructions
and Clarifications:
Instructions to a subordinate cab be best given orallythan in
writhing. If the subordinate seeks any clarification,he can get it
at once.
4. Assessing the Reaction:The reaction of the receiver can be
best assessed only in a
face to face communication.5. For Expressing the Feelings:
When two persons are talking, many matters can be saidexpressly.
But many matters are left unsaid or said byimplication i.e.
understood. This is impossible through a writtencommunication.
3. Non-verbal CommunicationAll the communication that occurs in
between the people
in an organisation may not be spoken, heard, written or read.
Inother words, all the communication is not verbal. Some may
benon-verbal i. e. unwritten and unspoken. The most 5
importantaspect in communication is to hear what is nt being
said.Sometimes , the non-verbal message also helps in carrying
a
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verbal message. E.g. smiling while greeting your
colleague.Mostly, non-verbal messages are spontaneous. However, it
doesnot mean that they are less important. Then on-verbal
commu-nication includes the pitch and tone of the voices,
bodymovement, physical appearance, time, touch, space and
territory.The common types of non-verbal communication in
businessare detailed as shown below.
1.Body Movement:Body movement as a media of communication can
be
discussed under three heads namely,(i) Facial expression,(ii)
Gestures, and(iii) Body stance.
i) Facial Expression: Successful communicators use facial
expression as a very
effective media of communication. The most expressive part
ofhuman body is face-especially eyes. Eye contact and eyemovements
tell a lot about a person. Hence, normally receiverof oral
communication give much attention to facial expressionwhile
receiving the message. This is because it will give a lotof
information about the inner feelings of the communicatee,which cant
be understood otherwise. However, if a subordinatecommitted a
serious mistake , executive may show anger on hisface. If this is
the case the subordinates may feel very bad andact indifferently.
So most of the executives now -a - days learntto scold the
subordinate with a feeling of concern for him. Thistype of approach
motivates the subordinates to improve theirwork performance.
ii) Gestures: Gesture is a motion of the body or limbs. It is an
action
intended to express the idea of feeling or to enforce an
argument.Gesture includes hand and upper body movements.
Theyprovide a lot of important information to face- to -
faceconversations. They are used to reinforce your verbal
message.
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iii) Body stance: Body stance is another form of non-other
communication.
It includes posture of standing, placement of arms and
legs,distribution of weight etc. By seeing the standing position of
aperson, one can understand whether he is interested in the talkor
feel very bore etc. For example, leaning slightly towards
thecommunicator would be taken as a sign of interest andinvolvement
in the talk, whereas leaning back might be taken asa sign of
boredom.
2. Physical Appearance: Physical appearance of a person is
important for creating
a good impression. This is because attractive people tend to
beseen as more intelligent and more likeable than
unattractivepeople are. So they can earn more. One can not change
all ofhis physical features. Some are changeable and others
not.However, understanding the importance of physical appearancecan
help any body to emphasise their strong points.
Ones clothing, Jewellery, furnishings at home and officeprovide
information about their value, taste, status, age etc.Hence, we
should give due weightage to these aspects also toget a good
appearance.
3. Voice Qualities: No one speaks in single tone i.e. in an
unvaried pitch of
the voice. Voice qualities include volume, speed, pitch,
tone,and accent. They carry both intentional as well as
unintentionalmessages.
Based on the pitch of the voice, the circumstance when itwas
conveyed etc., same sentence might carry different meanings.For e.
g. while answering the question who was late? Say youwere late, the
emphasis is given to the word you i.e. theanswer here is you for
the question who was late? Whereas whileresponding to the other
persons denial of being late say you
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were late, emphasis is given to were. However ,while
stressinghow late the person was, say you were late emphasis is
givento the word late.
4. Space and Territory: Different types of communication occur
at different
distances. Competent communicators determine their ownpersonal
space needs and those of others. They make thenecessary adjustments
to facilitate achieving his objective whilecommunicating with
people who prefer more or less space.Edward T. Hall in his work,
The Hidden Dimension hasstated that the psychologists have
identified four zones withinwhich people interact.
i) Intimate Zone:Intimate zone extends from physical contact to
about 18
inches where all your body movements occur. This is the areain
which you move throughout the day. It is an area normallyreserved
for close, intimate interactions. Business associatestypically
enter this space infrequently and only briefly perhapsto shake
hands or pat someone on the back
ii) Personal Zone:This Zone, extending from 18 inches to about 4
feet, is
where conversation with close friends and colleagues takes
place.Unlike inter action in the intimate zone, normal talking is
thefrequent in the personal zone. Some, but not a great deal
of,business interaction occurs here. For example, business
launchestypically occur in this zone..
iii) Social Zone:Social zone extends from 4 feet to 12 feet.
This is the
zone where most business exchanges occur. Informal
businessconferences and staff meetings occur within this space.
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iv) Public Zone :The public zone extends from 12 feet to as far
as the eye
can see and the ear can hear. This is the most formal zone,
andthe least significant interactions occur here. Because of the
greatdistance, communication in the public zone is often one way,
asfrom a speaker to a large audience.
4. Audio- visual communicationAudio-visual communication uses
the methods that
are seen and heard. It makes use of short films, slides,
videotapes, telecasts etc. Examples are small advertisement films,
ordocumentary films related to social issues etc. Screened
justbefore the main picture.
Audio-visual communication combines both sight andsound to
attract the attention of the communicatee. If it is ofonly visual
communication, people may just casually look at itand forget
afterwards. But if audio is also combined with visualaids, the
message conveyed will be retained much longer thanthrough other
media. It is most suitable for mass publicity, propa-ganda and mass
education.
1:5 BARRIERS TO COMMUNICATION
Communications fail due to various reasons.Sometimes,
subordinates may not be receptive. Sometimes,the superiors lack in
their expression. Besides, some otherbarriers may also come into
operation. The various barriers tocommunication can be discussed as
below.
1. Perception: An individuals view of reality is known as
perception.
Two individuals do not see things exactly alike. People
differgreatly in the way they perceive things and events. Even a
singleindividual has different perceptual styles depending on time
andcircumstances.
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Hodgetts say that, the senders meaning and thereceivers
interaction are not always identical, but it is notnecessary that
they be so. This is the basic barrier tocommunication.
2. Semantic or Language Barriers:Language serves as the basis
for the communication. It is
the medium through which views are conveyed. Sender shouldselect
the words and construct the sentences carefully. Wordsthat are used
to convey messages have several meanings. Thesender selects the
words as per his own frame of reference andwhich he thinks will
convey the meaning he proposes tocommunicate. On the other hand,
the receiver reads or listens tothe message and interprets it
within his own frame of reference.As people vary in their
experience, knowledge of the languageetc., there is a possibility
of semantic distortions. Thus, semanticdifficulties come in the way
of clear understanding.
3. Perfunctory Attention:If receiver pays very little attention
to the message,
communication in the sense of transfer of information
andunderstanding will fail. When the employee is pre-occupied witha
number of problems, sender faces such problem. In this
case,employee should be made to keep away his problems and listento
the message. If this is not done, he cannot proceed
thecommunication further.4. Status:
One of the basic barriers to communication arises due tostatus
relationship that exits in every organisation. The
superiorsubordinate relationships in the organisational structure
inhabitfree movement of information and understanding, exchange
ofideas, views etc.. Generally those who receive communicationjudge
the sender and naturally senders status has its own weight.For
e.g., any communication received from the management isviewed as
troublesome by trade unions; any message fromworkers will be
discounted by management etc.
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5. Resistance to Change:Generally, people resist changes.
Resistance to changes
will be strong when the proposed change is great. Managersshould
take all possible steps to overcome such resistance tochange. One
method of overcoming resistance is explainingthe subordinates as to
how they will be benefited by such changes.
6. Organisational Structure:Effective communication depends
greatly sound
organisational structure. If the organisational policies, rules
andprocedures are not clear, smooth flow of communication cannotbe
ensured. If the organisational structure has several layers
ofmanagement, it may result in delay and distortion
incommunication. Lack of facilities that ensures
effectivecommunication is another barrier that comes in the way of
clearunderstanding.
7. Premature Evaluation:Premature evaluation refers to a
tendency of forming a
judgement before listening to the message fully.
Prematureevaluation misrepresents the message. Thus, it acts as a
barrierto effective communication.
8. Emotional Attitude:Emotional attitude of the parties involved
in the exchange
of information is another barrier to effective
communication.When an individual is emotional, he may not be able
to knowthe frame of mind of other person.
9. Failure to communicate:Failure to communicate is a pervasive
barrier to
communication. The communicator may be lazy or it may beassumed
that everything is known to all. Sometimes, failure tocommunicate
may also arise from an intention to embarrass thereceiver or from
complexes like superiority, inferiority or dueto status difference,
Communication also has no impact on thosewho are not willing to
listen / read the message.
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25
10. Other Barriers:Other barriers include faulty translation,
badly expressed
messages, loss by transmission, lack of attention,
unclarifiedassumption, inadequate adjustment period and
communicationdistrust.
1:6 ESSENTIALS OF EFFECTIVE BUSINESS LETTERAll type of business
letter must confirm to certain well
recognised principles and should possess certain
essentialqualities. Business letters devoid of universally
acceptedrequisites will prove ineffective.
The essential of a business letter can be analysed underthe
following heads.
(i) The structure of a business letter.The structure of a
business letter refers to the proper
arrangement of the various parts or the different elements ofa
business letter. To give the letter the right look and to
ensureclarity and convenience, the letter should consist of the
fol-lowing components.
1. The Heading.2. The Date.3. The Inside Address.4. The
Salutation.5. The Body of the letter.6. The complimentary Close.7.
The Signature.Each of these part has a definite place and position
in
all business letters.1. The Heading
Almost all business firms use printed letterheads for
theircorrespondence. Generally, the name and the address areprinted
on the top of the letterhead but it frequently gives
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26
other particulars such as the description of business, the
tel-ephone number, the telegraphic address, the telex number,
Faxnumber, E-mail address etc. The letterhead of the large
concernmay give the addresses of its branches and that of a
branchmay give the address of its head office. To give a
balancedappearance to the letter, nearly one fifth of the total
spaceshould normally be used for the heading .
RANJAN PUBLICATIONS,17, Aminjikarai, R.S.N
Telephone :28 64 89 36 E-mail: [email protected]
2. The dateThis gives the date of the month and the year. It
appears
on the right hand side of the letterhead about five spaces
belowthe heading. Some letterheads contain a printed lineindicating
where the date should be typed. In England, theusual method of
indicating the date is to state it in originalnumbers such as Ist
March 2000. In U.S.A., it is usual to statethe numbers of month
before the date in cardinal numberse.g. March 1, 2000. Some people
omit the comma after thedate and the full stop after the year, but
it is generallyconsidered correct to use them.
The practice of writing the date as 1-3-2008 or 1/3/2008should
be avoided because it would give rise to errors,particularly in
foreign correspondence. For example, in U.S.A.1/3/2008 would been
January 3rd, 2008 while in England andin other Common Wealth
Countries it would mean as 1stMarch 2008.
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27
3. The Inside AddressThis gives the name and full address of the
person, firm
or company to whom the letter is written. It is one of
theessential ingredients of the physical make up of the
businessletter. It is generally typed two lines below the date line
andabove the salutation on the left-hand margin of the
letterhead.
Importance of Inside AddressThe typing of inside address is
highly useful in many
ways. They are:
1. This will provide the despatch clerk all theparticulars that
are necessary for writingthe address on the envelope.
2. If window type envelops are used, the insideaddress is a
must.
3. Since it is also imprinted on the office copyof the letter,
it will be easy to identify thenumber and the nature of the letters
sent outto specified parties.
4. The SalutationThe salutation is the similar to greeting like
good
morning, good day, good afternoon etc. used by us insocial life.
It is written about three spaces below the insideaddress.
The form of salutation depends on the personal relationbetween
the writer and the address as well as upon the lettersrank or
position.
The following are the usual forms used in business letters.Sir,
Dear Sir, Dear Sirs, Gentlemen, Dear Mr. Raveen,
Madam, Mesdames etc.
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28
5. The Body of The LetterThis is the most important part of the
letter. The ultimate
object of a business letter is to convey a message. The bodyof
the letter contains the principal message to be conveyed tothe
other party. Hence the other parts, though necessary, areonly
subordinates to the body of the letter. It is no exaggerationto say
that the whole of this book deals with the writing of thebody of
different types of letters. Therefore, the writer shouldtake utmost
care to set out the matter clearly. The mattershould be properly
arranged and presented in a logical manner.
In this connection, Mr.L.Gartside suggests thefollowing points
which the reader should always bear in hismind.
1. Write simply, clearly, politely, grammaticallyand to the
point.
2. P a r a g r a p h c o r r e c t l y c o n f i n i n g e a c
hparagraph to one topic.
3. Avoid stereo typed phrases and commercials.
6. The Complementary Close or SubscriptionThe complementary
close is merely a courteous leave
taking. In other words, it is merely a polite way of ending
aletter. It is like the salutation, conventional in form
andmeaning. A letter without a close or an appropriate close
isvulgar and ineffective.
The complementary close is written three spaces belowthe last
line of the body of the letter and just above thesignature.
7. The signatureThe signature follows immediately after the
complementary close. It is usually written in black
ink.Facsimiles can be used only in case of circular letters.
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Since the letter binds the signatory, the signature hasassumed
great importance. A person may sign in differentletters in
different capacities. Therefore, the signatoryshould clearly
indicate the capacity in which he signs. Forinstance, if the person
signs in his individual capacity, hissignature does not bid the
firm.
If he signs as a representative of the firm, he is notpersonally
liable. Therefore, care should be taken whilesigning the
letter.
1:7 THE LAY-OUT AND DESIGN OF A BUSINESSLETTER
The overall arrangement and appearance of the differentparts of
a letter is called its lay-out. It refers to thearrangement of the
various parts of a finished letter and to theneatness and spacing
of the written matter.
With the advent of computers in almost all offices, thecomputer
itself does the job of a suitable format and alignmentproportionate
to the matter therein were the conventional lay-out refers to-
(i) Arrangement of a letter proper on paper. The arrangement of
the typed area on the sheet of paper
should look good. As a rule, the body of the letter is
expectedto start two spaces below the salutation and end two
spacesabove complimentary close. The body should be aligned onthe
right hand side with the first line of the inside address ofthe
person to whom the letter is written.
(ii) Margins.The right hand and left hand margins should be of
nearly
equal width, even though the former may be a little widerthan
the latter. The margin should not be less than an inchwide, in any
case. However, an inch and a half is generally
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30
preferred. The margins on the sides should be about 2/3rd aswide
as those at the top and the bottom in order to see that theletter
looks well spaced.
(iii) Spacing.It is better to use single spacing between the
lines, with
double spacing between the paragraphs. However, if the letteris
short, double-spacing may be used throughout, with thefirst line of
each paragraph indented to indicate the necessarydivisions.
(iv) Forms of Indentions. We come across four ways in which
letters are typed
and indented. (a) Block or straight edged form; (b) Indentedor
stepped-inform; (c) Semi-blocked or combination form; (d)Hanging
indention form. Of these the first three are morepopular than the
last.
(a) Block or Straight-Edged FormIt is the most popular form used
at present. Indention
is avoided. The introductory address, salutation and
bodyparagraphs are aligned right from between the paragraphswhich
are indented.
This is the most symmetic form. It saves time for thetypist as
there is no need to shift the carriage of the typewritertoo
often.
(b) Semi-Block or Combination FormThis form of lay-out is
combination of the Block and
Indented forms. The heading and the inside address are inBlock
form while the initial line of each paragraph of the textis
indented five to ten spaces. This enables to identify clearlythe
separated paragraphs of the letter.
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31
Both these forms are usually accompanied by openpunctuation,
i.e., no terminal marks punctuate the lines of theheading and those
of the inside address.
(c) Indented or Stepped-in FormHere the lines of the inside
address and the opening
line of each paragraph begin a few spaces away from themargin.
The lines of the inside address are indented fivespaces to the
right of the first letter of the preceding line above.Close
punctuation is adopted in this form. There is a mark ofpunctuation
for each line of the inside address.The full-stops are marked at
the end of the last line of theletter-head and the inside address.
The intervening lines ofboth are followed by commas.
(d) Hanging Indention FormIn this form the inside address and
the salutation are
typed in BlockForm. The first-line of each paragraph in thebody
of the letter commences right at the left-hand marginbut the
subsequent lines are indented five or more spaces.Single spacing is
used between the lines with double spacingbetween the paragraphs.
This form is not much used.However, it is favoured in sales letters
to draw the attentionof the customers. It is suitable for letters
of a very informalcharacter that can stand novelty.
1:8 KINDS OF BUSINESS LETTERSIn every business concern, Letters
have to be
drafted and sent to the customers on various
occasions.Therefore, business letters depending on the occasion in
whichthey are sent can be classified as under;
1. Letters of inquiry seeking information about therequired
grades and replies.
2. Offers and acceptance.3. Orders and their execution
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32
4. Credit and status enquiry5. Claims and adjustments.6.
Collection letters.7. Circular letters.8. Sales letters.9. Banking
correspondence10. Insurance correspondence11. Export and import
correspondence12. Agency correspondence13. Transport
correspondence14. Secretarial correspondence15. Correspondence with
the Government16. Public relations letters.
The above classification is purely a matter of conven-ience. The
techniques of drafting these letters will bediscussed in subsequent
chapters.
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33
SELF- ASSESSMENT QUESTIONSAnswer the following questions
1. Communication is an exchange of __________ by twoor more
persons.
2 Face - to - face Communication becomes more effectiveif
accompanied with appropriate body language.
True / False3. Match the following 1. Written communication - a.
accurate 2. Oral communication - b. Permanent record 3. Information
must be - c. Immediate feed back
1:9 SUMMARYCommunication is a process whereby one person or
one
group conveys some information to another person or toanother
social group. Formal communication takes place viaformal channels
of the organisational structure establishedby the management.
Informal Communication is free from allthe formalities of formal
communication. Communications faildue to various reasons is called
barriers to communication. Theessential of a business letter is to
be analyses throughly in theend portion of this chpater.UNIT
QUESTIONS1. Define communication.2. What are the objectives of
communication?3. What are the process of Business Communication?4.
Name the various methods of business communication.5. What are the
advantages and disadvantages of oral,
written communication?6. State the main barriers to
communication.7. Is communication essential to business?8. List out
the kinds of business letters.9. Explain the layout of good
Business letter.10. Explain the various essential of a good
business letter.
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34
RECOMMENDATION FOR FURTHER READINGS1. Business communication -
M.S. Ramesh,
CC.Palkan shethi, Madhumati,
2. Business communication& Customer Relations - Dr. C. B.
Gupta
3. Business communication - Kathiresan & P.R. Radha4.
Essentials of Business
communication - Rajendra pal, J.S.Korcahalli
ANSWERS OF SELF- ASSESSMENTS QUESTIONS:1. Facts, ideas,
opinions, or emotions.2. True3. 1-b, 2-c, 3-a
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35
UNIT II KINDS OF BUSINESS LETTERSUNIT STRUCTURE UNIT II2:0
Introduction2:1 Letter of Inquiry and Reply2:1:1 Replies to
Inquiries2:2 Orders-Their Execution and Cancellation 2:2:1
Acknowledgement and Execution of orders2:2:2 Refusal or
Cancellation of Order.2.3 Claim, Complaints and Settlement of
Accounts2:3:1 The Art of Drafting Letters of Claims and
Complaints2:3:2 Hints on Writing a Letter of Claim or
Complaint2:3:3 Settlement of Accounts (Remittance Letters)2.4
Circular Letters2:4:0 Introduction2:4:1 Objectives of Circular
Letter2:4:2 Situation for Writing a Circular Letter2:4:3 Special
Hints on drafting Circular Letter2:5 Status Inquiries2:5:1 Hints on
giving Replies to Status Inquiries2:5:2 Steps in the Status Enquiry
Correspondence2:6 Collection Letter2:6:0 Introduction2:6:1 Guiding
principles for collection2:6:2 Hints on the drafting of collection
letters2:6:3 Stages in Collections
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36
2:7 Banking Correspondence2:7:0 Introduction2:7:1 Banking
Letters2:7:2 Elements of a Good banking correspondence2:7:3 Types
of banking correspondence
2:8 Correspondence of a Company Secretary
2:8:0 Introduction2:8:1 Classification of Secretarial
Correspondence
SELF- ASSESSMENT QUESTIONS: I2:9 Summary
Unit QuestionsRecommendations for further readingsAnswers of
Self-Assessment Questions
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UNIT - II
KINDS OF BUSINESS LETTERS
2:0 INTRODUCTIONBusiness correspondence extremely diverse.
There is a variety of correspondence that modern businessmanhas
to deal with within his business routine. It is very difficultto
classify the business letters or to give an exhaustive list ofthe
kind of letters a businessman has to write because
differentsituations call for different approaches. Hence, attempt
ismade, in this book only to show a few common forms of
lettersunder each class and deal with some of the important
typesincluded in it.
2:1 LETTER OF INQUIRY AND REPLYi) Traders send letters of
inquiry very frequently when
1. The goods they require are of a kind whichthey do not
regularly buy and they do notknow the current price.
2. They want to ensure that they have beenreceiv ing goods a t
the advantageousterms.
3. They want to discover better sources ofsupply, or
4. They want to tap new lines of business.
ii) While drafting such letters you should-1. Describe carefully
the kind and quality of
goods required.2. Give an idea of the probable size of the
orer.3. State clearly, the special form of packing etc.
desired, if any.
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38
4. State how the name of the supplier wasobtained, details of
your business, whetherthe probable purchase should be for cashor on
credit and give references if you wantto make credit purchase
(particularly whenthe enquiry is addressed to a firm which
noprevious transaction have been made).
5. Refer to the advertisement, if it is a firste n q u i r y m a
d e i n r e s p o n s e t o a nadvertisement.
6. Request for lowest quotations together withan assurance of
business.
7. Enquire regarding the time required fordelivery, terms of
payment, discounts etc.,and find out whether insurance and
deliverycharges are to be included in the quotations,i f the
enquiry is made from a foreignsupplier.
8. Give an idea about the size and frequencyof future orders,
the volume of businessexpected and the reasons for an
optimisticoutlook, if the enquiry is made to getconcessional price
for large or regularorders, or to obtain sole-selling agency fora
region or country.
The letters of enquiry should be brief and to thepoint. The
opening and closing sentences should be simpleand short.
iii) Watch the following opening sentences:(i) Will you please
send us sample of...(ii) Please quote your lowest prices for
the
following items/goods.
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39
(iii) Please send us your latest catalogue and pricelist of
...
(iv) Will you please let us know the terms andconditions....
iv) Closing sentences:(i) Will you please reply at your
earliest?(ii) We are ready to cover all our requirements
through you, should your prices and termsprove satisfactory.
(iii) Please treat our inquiry as urgent.
2:1:1 REPLIES TO INQUIRIES The reply to an inquiry may take
three forms:
(i) A letter answering the inquiry and referring to the
catalogue, or samples.
(ii) A letter containing a quotation.(iii) A letter enclosing a
quotation on a separate
paper or form.
The nature of the reply will, therefore, vary dependingupon the
circumstances. No hard and fast rule can beprescribed in this
regard. However, the specimen letters that follow may guideyou.
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LETTERS OF ENQUIRY AND REPLY
Letter No. 1. Request for catalogue.
MODERN CRACKERS,
P16, Raju Naidu Street,Paris Corner,
CHENNAI - 600 031Phone : 28712536,
e-mail : [email protected]
Date : 22nd June, 2008.
ToThe Sunshine Fire Works,36-Thiurmayam RoadSivakasi - 21
Dear Sirs,
Sub : Request for latest catalogue and price list
Please send us a copy of your latest catalogue andprice-list and
let us know your best terms for wholesalebuyers.
Thanking you.
Yours faithfully, For Modern Crackers.
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41
Letter No. 2 : Replay to letter No. 1.
THE SUNSHINE FIRE WORKS36-Thiurmayam Road,
Sivakasi - 21Cell No. 9994588033,
Ph.No. 239 245.e-mail: [email protected]
To,The Modern Crackers,16, Raju Naidu Street,Paris
Corner,Chennai - 600 031
Sub : Catalogue and Price-listDear Sirs,
We thank you for your letter dated June 22, andhave pleasure in
sending you a copy of our latestcatalogue and price-list.
We need hardly add that behind every The SunshineFireworks is
our reputation of 75 years as makers ofquality crackers and all
other fire items, especiallydesigned for children.
Our list of prices is subject to a trade discount of30% and an
additional commission of 5% in case yourpurchase from us exceed Rs.
1,00,000.
We trust that you will take advantageof theseterms.
Yours faithfully,for The Sunshine Fireworks.
Manager
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2:2 ORDERS-THEIR EXECUTION ANDCANCELLATION
An offer that is accepted is followed by an order. Theletter
accepting a seller s offer is called a Letter ofAcceptance. Many
times, the letter of acceptance itselfconstitutes an order and is
sufficient to complete thetransaction. However, a formal order may
also be sent. Anorder may also be placed, without any previous
enquiry oroffer, i.e., on the basis of printed catalogues or
advertisements.
Great care is necessary in the drafting of orders :(i) to ensure
its efficient handling, and(ii) to eliminate all doubts resulting
in the loss of time
and sometimes even the market.Hence, a businessman writing an
order should:1. Give full and correct particulars of the
quality,
size, colour, etc.2. Be precise in stating quantities. State
whether a part of the goods you haveordered may be sent, should
it proveimpossible to supply the whole quantitywithin the time
stipulated by you.
3. Indicate clearly the type of packing required.4. Mention the
price and terms on which the
g o o d s a r e b e i n g o r d e r e d t o a v o i
dmisunderstanding. Mention the mode of transport,whether by
steamer, goods train, passenger train,parcel post etc.
5. Indicate clearly the address to which thegoods are to be
delivered if the place ofdelivery is other than the address of the
buyergiven in the order.
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43
6. Give necessary instructions if your intentionis that the
seller should insure the goodsordered. Give special instructions
forpacking, insurance, payment of customs dutyetc., at the end of
the letter.
Other HintsIf only a few things are ordered, you can specify
the details in the body of the letter itself. But mention
thedetails at the foot of the letter or on a separate sheet when
alarge number or variety of goods are required.
Order FormsPrinted order forms that are perforated, numbered
and kept in serial order in Order Books are generally used bybig
business houses. The person placing the order fills in thenecessary
particulars. The order is generally made out intriplicate. The
original is sent to the seller. The first copy isfield and the
other copy is sent to the receiving departmentfor checking the
items of goods on arrival. Thus, the orderforms save time and
labour and facilitate quick filing and serveas a ready
reference.
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LETTER NO. 1: An order for the Supply of Timber.
DEVAN WOOD MART
16, Developed plot,Industrial Estate, Guindy,
CHENNAI - 600 032Phone : 22254850,
e-mail : [email protected]
Date : 14th March, 2008.To
The Manager,Sai Saw Mills,Tuticorin.
Dear Sirs,
Sub : Order for timber
Thank you very much for your letter dated February26, 2008
quoting price for 800 loads of teak now lyingin the Commercial
Docks, which I accept, and you candraw on me for the amount named
at three months,delivering half of the timber at my wharf at your
earliestconvenience.
I will give you instructions shortly regarding thereminder.
Yours faithfully,
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45
2:2:1 ACKNOWLEDGEMENT AND EXECUTION OF ORDERSHints. While
drafting the letter of acknowledgement andconfirmation (acceptance)
of an order, you should -
(i) convey your thanks for the order placed;(ii) refer to the
number and date of the order
letter; and(iii) specify (although it is a repetition) the
key
points like the description and the quantityof the goods
ordered, terms and conditionsrelating to delivery and payment
etc.,
End the letter by soliciting further orders. Make areference to
the total number of invoices enclosed to avoidthe possibility of
being mislaid or improperly field renderingquick reference very
difficult.
You need not confirm the order, if the order is executedat once.
Where the order cannot be executed owing to someproblem or defect
like-
(a) the lack of correct and clear informationrelating to the
terms of delivery and payment,
(b) modification of the terms of offer;(c) exhaustion of
stocks;(d) offering substitutes; and(e) extension of time of
delivery etc.,You should point out such problem or defect in the
letter
of acknowledgement and confirm the order when-(a) the
requirement is fulfilled;(b) the defect is corrected; or(c) the
problem is solved.Word the letter tactfully and with due courtesy.
For
instance, if a delay in execution is anticipated owing to
theinsufficiency of stocks, persuade the customer to give
hisconsent for a delivery at a later date (after some
time).Likewise, offer some substitutes, if any.
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46
Letter 1.Letter regretting inability to execute order owing
toexhaustion of stock and offering substitutes.
VARSHINI CLOTH STORES
Ph................... 48, Kelambakkam,Fax.................
Vandalur main road,
Mambakkam,Chennai - 600048
May 21, 2008.
ToM/s. K.V.P. Textiles,728 - Dr. Nanjappan
Road,Gandhipuram,Coimbatore.
Sirs.
Sub : Inability to execute your order
We thank you for your order V215 dated May 12,2008 for 150
metres of each of the sample patternsenclosed with your letter.
These patterns were importedby us three years ago and they have
been completely soldout. We are, therefore, sending you samples of
the latestdesigns of imported cloth and shall be glad to
receiveyour order for them.
As our stock of some of these designs are very limited,please
order your requirements within 7 days from thisdate. Needless to
say, your orders will always receiveour prompt and careful
attention.
Thank you.Yours faithfully,.............................
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Letter 2. A letter confirming only a part of the order.
Nitin ElectronicsPh ................ 25-A Wing,E-mail
..................... Vakola Bridge, Santacruz (E),
Mumbai - 5522nd June, 2008
Sub : Execution of your order in part
We thank you for your order of 18th June. Weshall be pleased to
supply you items 1 to 14 at the pricesmentioned by you. As regards
the remaining six items,we are sorry that we are unable to accept
your prices.We enclose a proforma invoice showing the lowest
pricesthat we shall charge you for these remaining items andon
receiving your confirmation we shall at once despatchthe goods.
As you have instructed us to send all the goodsin one lot, we
are withholding the execution of the firstpart of the order till we
hear from you. In case you requirethe goods very urgently, please
wire acceptance of ourprices to enable us to despatch the goods
immediately.
Thank you.
Yours faithfully,
...................
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48
2:2:2 REFUSAL OR CANCELLATION OF ORDER.REFUSALA business house
may have to refuse or decline an order
under unavoidable circumstances like--(i) an order received
directly from a retailer
of a particular locality where a retail sellingagency has
already been granted to adealer of that locality;
(ii) unsound financial position of the customer;and
(iii) sudden bankruptcy of the customer etc.,While drafting
letters of Refusal, a businessman should
(i) state the reasons for declining the orderp o l i t e l y a n
d d i r e c t t h e c u s t o m e r t ot h e nearest retail agent
(in the first case);
(ii) refuse the order under some other reason /pretext (in the
second and third case); and
(iii) suggest a few alternative, if any, to pleasethe
customer.
CANCELLATION.An order placed already may have to be cancelled
under
certain unforeseen circumstances, provided(i) the order is a
recent one;(ii) the manufacture of goods has not been taken
in hand; or(iii) the dealer has not yet despatched the
goods.After deciding to cancel and while drafting a letter of
cancellation of an order the businessman must communicatethe
decision immediately to the supplier, preferably bya telegram
followed by a letter; and point out clearly theactual reason for
cancellation particularly when the decisionwas taken owing to
inordinate delay in its execution.
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49
Letter No. 1. A letter of refusal expressing inability toexecute
an order.
NRT TIME ZONEPh...................... Opp. Canara Bank,Fax
................... Vakola Bridge,E-mail .............. Mumbai.
ToStandard Watch Company,Kempegowda Road,Bangalore.
Dear Sirs,Sub : Inability to execute your order on the
stipulated
date
We thank you very much for your order of 2ndFebruary for 2008
Clickwel Wall Clocks for deliveryby 5th March, 2008.
We greatly appreciate your interest in clocks and wishwe were in
a position to accept your order. But as wehave already in hand
several pending orders, which willkeep our factory busy for a long
time, it will not bepossible for us to book your order, even if you
were goodenough to extend the date of delivery by several
months.
To cope with the increasing demand for Jupiter clockswe have
ordered a new plant from Japan and it is likelyto be installed next
May.
We are very sorry for our inability to serve you atpresent, but
look forward to the time when we shall beable to attend to your
order. We will keep in touch withyou.
Thank you, Yours faithfully, per pro.N.R.I Time Zone,
N.R. Narayanan, Manager.
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50
Letter No. 2 : A letter cancelling order for undue delay.
J.K. MILLS
Ph................. 28, Periagoundanpalayam,E-mail
:.......................... Beema Nagar,
Pollachi road,Coimbatore..
Date : 5th May, 2008M/s Asif Mohamed & Brothers,Mysore-7Dear
Sirs,sub: Cancellation of the Order
We had placed an order with you on 4th April, 2008.for 10 dozens
of Royal Banians to be delivered on 4thMay, 2008 But till now we
have received neither thegoods any letter from you.
As the time of delivery expired long ago we arecompelled to
cancel the order, and to refuse them thegoods arrive we are
sorry.
Yours faithfully,Ezilarasan,
Manager
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2.3 CLAIMS, COMPLAINTS AND SETTLEMENT OFACCOUNTS
Errors very frequently occur even in the best managedbusiness
houses, because to err is human. The moment anydiscrepancy or
mistake is discovered by any trader, he mustimmediately bring it to
the notice of the supplier by writing aletter of complaint or clam.
Instead of unnecessarily enteringinto a dispute, the supplier
should honourably try his best tosetttle the matter amicably, if
the defects are proved.
Occasions giving room for a claims or complaint aremany and
varied in nature and hence it is very difficult toenumerate all of
them in full. However, the following are themost important causes
that give rise to claims and complaintsthat are mostly made by
buyers :
(i) inordinate delay in the execution of the order.(ii) variance
in the quality and quantity of the
goods supplied as against those ordered.(iii) supply of wrong
goods or goods of inferior
quality.(iv) de l ive ry o f damaged goods owing to
defective packing(v) var iance in the te rms and condi t
ions
relating to the payment and delivery etc.,2:3:1 The Art of
Drafting Letters of Claims and Complaints
A trader must be extraordinarily careful while draftinga letter
of claim or complaint in a satisfactory manner becausesuch letters
are generally drafted in a mood of dissatisfactionor anger.
Successful drafting of claim and complaint letterscall for great
tact, politeness, sympathy and patience, in orderto avoid
unnecessary bitterness, long and tedious disputes andlegal
proceedings over patty issues.
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2:3:2 Hints on Writing a Letter of Claim or ComplaintThe letter
should be :1. fair and temperate but not apologetic;2. based only
on facts without imputation;3. friendly and courteous letters prove
more
effective than a letter breathing fury andthreats in gaining the
co-operation of thereader;
4. comple te , fu rn i sh ing a l l the de ta i l sconsidered
very necessary to adjust whatis wrong (like the date of the
originaltransaction, the order number or the invoicenumber, the
list or description of goods etc.,);
5. definite and reasonable in its request forredress; that is,
it should make a concretesuggestion for redress; and
6. brief in the statements relating to theinconvenience suffered
by the customerbecause of the error.
If any complaint proves to be unfounded or unjustified,the buyer
should not hesitate to acknowledge his error andapologise.
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Letter No. 1 : A letter complaining the despatch of
defectivegoods.
ARUNACHALA EDUCATIONALCHARITABLE TRUST
Goyal Complex,Chennai Road,
Thiruvannamalai.April Ist, 2008
ToM/s. Mathi Publication,117- Maduai Main
Road,Palakkarai,Trichy.
Dear Sirs,
Sub : Defective and damaged books
Thank you very much for the despatch of 16 bookson Business
Communication sent to us as per our orderNo. MBH/71/7 DATED March
28, 2008. On goingthrough these books we found that one of the
copies sentby you is incomplete as pages 45 to 64 (20 pages)
aremissing while another copy is badly damaged.
Will you please let us know immediately whether weshould send
them back so that you may replace by defectfree copies?
Thank you.Yours faithfully,
.......................................
For Arunachala Educational Charitable TrustManokaranr,
Trustee.
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2:3:3 SETTLEMENT OF ACCOUNTS
(REMITTANCE LETTERS)After receiving the goods ordered, the buyer
should not
only acknowledge their receipt (unless the goods are sent witha
delivery note) but also arrange remittance of the amountdue to the
seller. The mode of payment depends upon thearrangement between the
buyer and the seller. The possiblearrangements are :
(i) C.O.D. (prompt cash remittance after thereceipt of
goods).
(ii) Credit for a certain period (whose paymenti s t o b e m a d
e w i t h i n t h e s p e c i f i e dp e r i o d b y c a s h , o r
c h e q u e o f b yacceptance of a Bill of Exchange).
The cost of remittance is generally borne by the debtorwho
remits, excepting in a few special cases where the creditormay
bear. It is easy to effect payments by transferring theamount from
the buyers account to that of the seller, if bothare having their
own separate bank accounts. Remittancesagainst periodical
statements of accounts received by thedebtor from the creditor are
generally arranged when thereare regular dealings between them.
The Letters of Remittance should be written withspecial care and
accuracy as they involve matters relating topayment of money.
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Letter No. 1: Letter acknowledging receipt of goods andinforming
remittance by cheque.
PALAVAN PALACEPh........................ East Coast
RoadFax...................... Mahabalipuram -
28E-mail................. May 3, 2008..
ToM/s. Rohini Enterprises,Mysore.
Dear Sirs,Sub : A cheque for Rs. 2250/-
The Camel Hair Rugs invoiced by you on April 30,2008. have
arrived and are satisfactory. We enclose acheque for Rs. 2.250
(Rupees two thousand two hundredfifty only) in full settlement of
the amount of your invoice.The cheque No. Is ............ of
corporation Bank.
Please acknowledge receipt and credit us with theamount.
Thank you.Yours faithfully,
...........................
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2.4 CIRCULAR LETTERS2:4:0 Introduction
In the course of business, occasions may arisewhen it becomes
necessary to notify all the customers aboutcertain fundamental
changes in the firms policy, constitution,place of business etc. In
those circumstances, the facts arecommunicated to a large number of
customers through circularletters. A circular letter can be defined
as a letter containinga formal message addressed to a large number
of customers.Since the message to be conveyed is the same, the
circularsare generally printed or cyclostyled leaving space for
insideaddress.
The names and addresses are incorporated or typed onthe space
provided. Thus, a circular letter is a letter of whichmany copies
are prepared and sent to a number of customers.
2:4:1 Objectives of Circular LetterThere are four objectives of
writing circular letters.
They are the following.
1. To obtain publicity for a cause, a campaignor a
productintroduced.
2. To make the reader interested in theircontents.
3. To i m p r e s s t h e r e a d e r w i t h f a c t s a n
dinformation about the firm, its policy etc.
4. To gain the confidence of the reader.
2:4:2 Situation for Writing a Circular LetterCircular letters
are usually written in the following
occasions :
1. Establishment of a new business.2. Admission of a partner
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57
3. Change in the address of the place of business4. Death or
retirement of a partner5. Purchase of a business.6. Obtaining an
agency.7. Price reduction and clearance sales.8. Conversion of
partnership into a company.9. Introduction or arrival of new
products or new
schemes.
2:4:3 Special Hints on drafting Circular LetterCircular letter
is a constructive force. To make it more
effective, different strategies should be adopted for
differentoccasions. Therefore, the task before the writer is not an
easyone. The following points are to be borne in mind whiledrafting
circular letters.
1. Establishment of a New Business:A circular letter announcing
the establishment of a new
business should touch the following matters.
1. Name of the firm, address and the nature ofits business.
2. Date of opening of the business firm.3. The knowledge of the
proprietor, his
experience and reputation.4. A reference that the goods of high
quality
are being offered at competitive prices.5. The capital at the
disposal-exact amount
however, should not be disclosed.6. An invi ta t ion for a t r
ia l order and a
s u g g e s t i o n t h a t t h e r e s u l t w o u l d b
esatisfactory.
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58
2. Admission of a Partner:A letter of this type should touch the
following points.
1. Circumstances that led to the admissionof the partner,
expansion of business etc.,
2. The name of the incoming partner.3. His business experience,
knowledge and
ability.4. An appreciation about his assistance and
how i t sha l l he lp the f i rm to sa t i s fycustomers wants
more effectively.
5. An expression of thanks to the customers fortheir patronage
in the past and a courteousrequest for its continuance in
future.
3. Change in the Address: This letter should highlight the
following.
1. The reasons the promoted the firm to shiftto new
premises.
2. The relative superiority of the new premises.3. The address
of the new premises.4. An explanation how the new location
shall
be conducive toefficiency in manufacture ordistribution.
4. Retirement or Death of a Partner:The letter should include
the following points.
1. An announcement of the fact either death orretirement with
regret and so appreciationwith reference to his service.
2. An assurance that the business shall becontinued on the same
lines as before
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3. In case of retirement, specify the reasonsthat led to his
retirement.
4. A note tha t the reconst i tu ted f i rm isadequately
financed, deficiencies havebeen adjusted by contribution from
theremaining partners.
5. If the name of firm is changed, the newname should be
communicated.
5. Purchase of a Business: The letter can be drafted on similar
lines
suggested for circularis announcing the establishment of
abusiness. In addition to them, the following points should
beincluded:
1. An announcement of the fact and the nameunder which the
business shall be conductedin future.
2. If the firm has been successful in the past,a reference that
the traditions shall bepreserved.
6. Obtaining an Agency: Drafting a letter to announce the
obtaining of an
agency cells for special skill and care. It should cover
thefollowing points.
1. The details of the agency obtained.2. Comparative merits and
advantages of the
goods or services entrusted under theagency.
3. If the product offered is unknown in thelocality, a reference
to the excellence ofthe product and fairness of its prices.
4. An invitat ion for a t r ial order and ana s s u r a n c e t
h a t t h e r e s u l t w o u l dbe satisfactory.
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7. Price Reduction or Clearance Sales: A price reduction or
clearance sales is generally
advertised in newspapers or by posters and handbills. But,
attimes, businessmen can announce them by means of thecircular
letters as well. The comparative advantage of acircular letter over
the other means of advertising are thefollowing.
1. A letter can be addressed to a special classor a selected
number of persons and is lesslikely to be overlooked.
2. The product can be more fully explainedo r d e s c r i b e d
i n a l e t t e r t h e n i n aadvertisement.
3. A let ter unlike an advert isement canbe kept by the
recipient in his file forfuture reference.
While drafting circulares of this type, the followingpoints must
be touched.
1. The nature and date of the sale and the mostattractive
features of the offer.
2. An invitation to the customer to visit theshop.
3. Range and variety of the products offeredu n d e r c l e a r
a n c e s a l e s . H o w e v e r ,c a r e s h o u l d b e t a k e
n t o r e m o v et h e impression that they are only forthe
fortunate few.
4. If the reduction in price is really great, theactual price
should be quoted.Both theoriginal prices and the reduced pr
icesshould be given, so that the customercan make comparison of the
reduction.
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8. Conversion of Partnership into a Limited Company1. An
expression of the expansion of the
firms business and the consequent needfor more capital.
2. An assurance that their quality shall suit thecustomers needs
and tastes.
3. The competitive return of the prices, termsetc.,
This type of circulares is purely sales letters, which aimsales
promotion. Therefore, the principles for drafting salesletters are
equally applicable to these letters also.
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SPECIMEN CIRCULAR LETTERSLetter 1. Establishment of a New
Business
K.S. PAPER MART
48, T.H. Road,Chennai - 600 005.
10th May 2008.Dear Sir,
We are pleased to inform you that on 20th May2008, we shall be
opening a retail paper stores, underthe style K.S. Paper Mart at
the above address, whereyou may rely on receiving high-quality
paper atcompetitive prices.
The capital at our disposal is sufficient toenable us to honour
our obligations and to lay in stocksdifferent varieties to satisfy
the most exactingrequirements.
We hope that a trial order would win yourfurther custom. An
opportunity to prove the truth ofthis claim would be greatly
appreciated.
Yours faithfully,K.S. Paper Mart,
K. SridharJ. Sundar
Partners.
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Letter 2. Admission of a Partner
RATHNA ELECTRICALS
15, Netaji Road,Coimbatore - 641 001
15th May 2008.Dear Sir,
We are pleased to inform you that we have this dayadmitted into
partnership Mr. K. Ranjit, who has for manyyears been associated
with our business in variousresponsible positions.
We are confident the Mr. K. Ranjit will exert everyeffort to
further the interest of our firm and we trust thatyou will continue
to favour us with your valued custom.
Yours faithfully,Rathna Eletricals,
N. PoaghavanManaging Partners.
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Letter 3. The Change of Address
ARUNA MACHINE TOOLS (P) LIMITEDNo. 10, Industrial estate,
Madras Main Road,Madurai - 625 001.
10th May 2008Dear Sirs,
The steady growth of our business has made essentialan early
move to a larger premises. Our old factory hasrapidly become unable
to cope efficiently with theincreased demands of both old and new
customers andto ensure satisfactory service, a large area at the
aboveaddress has been acquired.
The site is particularly good one in the heart ofa large
Industrial estate within the easy reach of therailway and the road
transport difficulties are thusreduced to minimum and early
deliveries are ensured.
The new factory offers great scope formechanization and a
resulting increase in both thequantity and quality of our output is
confidently expected.Transitional periods, as you know will give
rise toconsiderable difficulty. We trust that you will in
thecircumstances allow us a certain amount of latitude. Asthe
factory will be ready for production within a for night,we can
assure you of the prompt delivery of all goodsordered newt
week.
We take this opportunity of expressing ourthanks for your
confidence in the past, and we hope thatthe improvements we shall
introduce will lead even tomore business.
Yours faithfully,For Aruna Machine Tools (P) Ltd.,
V.M.P. RenganathanGeneral Partners.
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2:5 STATUS INQUIRIESGoods may be sold for cash or credit. When
they
are sold for cash the deal ends there. But when they are soldon
credit; it is necessary to know the trustworthiness of
thecustomers. Hence the Credit Sales play a vital part in thegrowth
of any business.As business on credit invariably carriesan element
of risk of non-payment businessmen always makeenquiries regarding
the financial standing, reputation,credit-worthiness and above all
the character of the newcustomers before entertaining credit deals
withthem. Such information relating to the status of
CreditCustomers can be obtained from all or any of the
followingsources:
(i) Business acquaintances of the prepositivecredit
customer;
(ii) Credit Information Agencies (also calledMercantile Inquiry
Agencies); and
(iii) Banks.(i) Trade References
Usually an order for goods or application for anappointment or
an Agency from an unknown person willcontain Trade References,
i.e., the names of firms orindividuals to whom inquiries about his
standing may beaddressed. If the order or application does not give
anyreference, a request to furnish the same must be made
verytactfully by careful wordings.
The business friends of a prospective customer who isin need of
credit facility or an agent who wants agency maysupply the required
information free of charge.
The firm giving credit or a job or an agency should takecare to
see that the persons whose names are given asreferences are
themselves reliable, by making use of severalsources of information
and checking them against one anotherbefore a final favourable
decision is taken.
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66
(ii) Credit Inquiry AgenciesInformation Bureaux supply reliable
information
regarding the status and standing of any person of
firm,professionally, according to a fixed scale of charges.
Such information can also be had from Chambers ofCommerce and
Trade Associations.
(iii) Bank References As a Banker will answer Status inquiries
only from
another banker, the business house making the inquiry
mustaddress it to its own banker and ask him to obtain the
requiredinformation from the banker whose reference the
prospectivecustomer or agent has given.
2:5:1 Hints on giving Replies to Status Inquiries1. Make it as
brief as possible, but let it be clear
and adequate.
2. State only on the basis of your personalk n o w l e d g e a n
d e x p e r i e n c e o f t h ecorrespondent and not on
hearsay.
3. Do not specify the amount up to which itwould be safe to
grant credit unless theinquirer is very particular about it.
4. Express the unfavourable opinion withextreme care and tact,
the best way out isto state that you are unable to express
anyopinion about the person about whose statusthe inquiry is made.
Avoid mentioning thename of the firm, if it is necessary to
givesome unfavourable opinion.
5. Always make it clear that -
(i) You are in no way responsible for theinformation you
give;
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(ii) t h e m a t t e r s h o u l d b e t r e a t e dprivate and
strictly confidential;and
(iii) you should not to be quoted2:5:2 Steps in the Status
Enquiry Correspondence1. Seller / Dealer - to Customer - asking for
his
Trade and Bank Reference.2. Customer - to seller - furnishing
his Trade
and Bank Reference.3. Seller - to (i) Trade Reference
to (ii) Bank Reference4. Trade Ref. - to Seller giving
Favourable or
Unfavourable Reply.5. Bank Ref. - to Seller giving
Favourable
Unfavourable Reply.6. Seller - to customer executing
refusing
to execute the order.
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Letter No. 1: A letter asking for reference.SIDDHARTA FURNITURE
WORKS
110, Subash Road, Shimoga - 6.Phone No.......................Fax
...................E-mail ..............
March 4, 20....
ToMessrs Shankar Rao & Brothers,4, Gurumurthy Street,Hassan
- 5Dear Sirs,
Sub : Your Trade and Bank References
Thank you for your order of March 1, 20 .....We are glad to
inform you that it is having our attention.It has been a regular
practice of our firm to ask for a fewtrade references, while
opening an account for the firsttime. As we did not have the
pleasure of doing businesswith you earlier, you would be helping us
a lot if youcould send us, at your earliest, the names of two or
threebusiness houses of standing.
Yours faithfully,For Siddharth Furniture Works
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Letter No.2: A letter by the customer furnishing his codeand
Bank References.
SHANKAR RAO & BROS.4, Gurumurthy Street,
Hassan-5Ph......................Fax ...................E-mail
.............. March 8, 20....
M/s Siddharth Furniture Works110, Subash Road,Shimoga-5
Dear Sirs,
Sub : Our Trade and Bank References
As required by you we are furnishing below our Tradeand Bank
references with whom we have been havingbusiness transactions since
last fifteen years.
Trade Reference - Varum & SonsShop No. 10,
MajesticCircle,Bangalore- 560002.
Bank Reference - Corporation Bank of OrbitYard, Hubli-2.
Kindly complete the formations and execute our orderat your
earliest.
Thank you,Yours faithfully,.....................
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2:6 COLLECTION LETTER2:6:0 Introduction
Credit is incidental to trade. No businessman cansurvive in this
competitive business world without extendingcredit to his
customers. When credit is given to the customer,the problem of
collection shall naturally arise. Thebusinessman cannot realise the
real profit on a sale until hecollects the amounts involved in it.
In other words, profitwill remain as a mere obstruction if
collections of credit salesare unduly delayed or result in large
amounts of bad debts.
Timely collection is also very important from the pointof
working capital position of the firm. Prompt collectionreleases the
funds locked in debtors accounts and ensures asteady flow of
working capital and facilitates further business.If uncleared even
to continue his business unless he isfinancially sound. It is,
therefore, rightly remarked that agood collection record is one of
the essentials for success
A collection letter is also called a Dun. A Dun is aspecial
notice sent to draw the immediate and special attentionof the
debtor. The word Dun is derived from the MiddleEnglish word Dunnen,
which means to make a loud noise,i.e., each successive collection
letter has greater force andpressure than the previous one. A dun
means an importunate(persistent) creditor or bill collector. To dun
means toimportune for payment of debt. Therefore, Dunning lettersor
Collection letters refer to a series of letters written againand
again for the settlement of account.
2:6:1 Guiding principles for collectionThe purpose of collection
is to collect the amount when
they are due. No firm can afford to allow its customers totake
undue liberty with the credit facilities given to them. Atthe same
time, undue pressure shall irritate the customers andeven lead to a
loss of valuable customers. It is, therefore, a
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delicate task and similar to the task of walking on a wire or
arope where the walker should maintain a balance. Whilecollecting
the dues also the businessman should strike abalance between
leniency and firmness.
But no hard and fast rule can be laid down forformulating
collection policies. The collection proceduretends to very with
individual circumstance, nature of thecustomers, their past
records, the possible difficulties theyare facing. The collection
policy, in spite of the minorvariations required, should be
governed by two cardinal
principles. They are :
1. Prompt customers.2. Good but slow payers3. G o o d b u t u n
a b l e t o p a y b e c a u s e o f
u n a v o i d a b l e circumstances.4. Fraudulent or reckless
customers.
2:6:2 Hints on the drafting of collection letters1. Draft the
Collection Letter after a careful understandingof the peculiar
nature of the customer, the way in which hehas handled his account
and his present condition etc.,There are different types of
customer such as:
1. Honest.2. Dishonest3. Negligent4. Miserly5. Aggrieved (those
who are in financial difficulties).
2. Assume that the customer will pay (if you consider
thecustomer hopeless, he may take advantage of this).
3. Do not be apologetic (in requesting payment from
yourcustomer, you are asking no favour).
4. Make straightforward request for payment.
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72
5. See that the tone of a collection letter is courteousand
friendly but firm.
6. Leave the way open for the debtor to pay with goodgrace.
7. Never send it on postcard.8. Apply the highest pressure only
at the time when the
customers business is at its highest peak.9. Leave an interval
of a weak or two between two
collection letters.10. Avoid as far as possible threats (or
legal action) because -
1) it is confession of the deplorably inefficiencyof the
collection epartment;
2) it is expensive;3) it leads to a slow and tedious process;
and4) it will result in loss of customers. However,
when a threat is made, see that the same isc a r r i e d o u t ,
w h a t e v e r m i g h t b e t h econsequences.
2:6:3 Stages in CollectionsThe stages in the collection process
are well
established. The collection letters are usually written in
aseries. In each successive letter, the tone becomes strongerand
sent out at intervals varying with the type of credit riskand the
amount involved. Even for a fourth grade customerwho is fraudulent,
all the successive stage should be passed.In other words, even
after knowing a debtor as reckless, thecreditor should not resort
to the final stage of warning at thebeginning itself. The following
are the routine stages in thecollection process.
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I. Sending Statement of AccountII. RemindersIII. Stronger
Reminders.IV. Inquiry and DiscussionV. Appeal and Urgency.VI.
Demand and Warning.
Stage I - Sending Statement of AccountThe actual collection
correspondence starts from the
stage of sending reminders, because sending a statement
ofaccount is the duty of the creditor. A statement of Account isa
copy of the customers account in the sellers ledger showingthe
balance to be paid as on a particular date. It serves as asimple
reminder to the debtor that he owes a particular amounton the date
of the statement or letter. It does not make anyrequest for
payment. If the first letter remains unrepaid, areminder is sent
pointing out the possibility of an oversightor loss of the
document. A duplicate statement of accountaccompanies the second
letter. These two letters are merestatements. The second letter is
also know