Loading
Notes
Study Reminders
Support
Text Version

Types of Business Letter

Set your study reminders

We will email you at these times to remind you to study.
  • Monday

    -

    7am

    +

    Tuesday

    -

    7am

    +

    Wednesday

    -

    7am

    +

    Thursday

    -

    7am

    +

    Friday

    -

    7am

    +

    Saturday

    -

    7am

    +

    Sunday

    -

    7am

    +

 Good morning friends and welcome back to NPTEL online certification course on Effective Writing. As you all remember that presently we are doing the course effective writing and in this course we are in business writing section, where we have been talking about the various nuances of business writing. And in the previous lectures, we have talked about the format of business writings especially business letters We talked about the different forms of business letters and we also talked about the formats, we talked about the several styles of drafting business letters. Today we are going to talk about the Types of Business Letters. Now friends, you might be thinking is it essential to have a sort of expertise in writing business letters. Yes of course, because all of you know well that in order to be successful in any organization, it is not only important that you are familiar with the machines or you are familiar with some other technological devices. Your overall success depends upon your other skills as well in which writing plays an important role. Now, having discuss the various formats of business letters because when you are at a workplace, you come across several forms of writing and especially in order to transact business, you are from time to time also expected to show your expertise in writing or drafting business letters. Now, there can be several category of business letters or business correspondences that you can also say. But then depending upon the function and the need in the present day world, we have taken some types of business letters which are actually very important and which hold a very important position in the business world. So, we shall restrict our lectures to discussing the types of business letters such as letters of credit and placing orders, refusal letters, collection letters, sales letters claim or complaint letter and then adjustment letter. Now, you might all be thinking that in business is the word credit also having some importance, yes. When two organizations have a business relationship you know you remember well that we have talked earlier that in business goodwill is very important and this goodwill is sustained or goodwill continues with the sort of business relationship that you have maintained from time to time. So, in order to transact business, we always do not pay in cash or we order for goods, but every now and then as depending upon your organization. You might find that every now and then we do not pay everything and get everything. There are certain norms there are certain procedures to follow and most of the businesses actually depend on credit. In many cases even when you have to make payment, first is that you order and even before order you inquire about the goods that you want to have for your business and then you also send them some sort of orders. And these orders for the first instance when received the other party sends you an invoice and when you get the goods either you pay or depending upon the agreement or depending upon the sort of negotiations you have had, you actually go for the deal. So, letters of credit are also important and you have to draft letters because on majority of occasions, you do not pay everything in cash. Most of the organizations depending upon their goodwill, they actually have transactions based on credit that is why you need to understand how to draft a successful credit letter. Because when you want things on credit what is of utmost importance is that you get things on credit, but it is not every now and then important that you will be getting things on credit. Even when with an organization, you have been dealing with if you have maintained a sort of business relationship you might be getting things on credit, but every now and then that may not be possible also. Some new organizations when they also want to start their ventures or when they want to have some goods on credit for that also there are certain requirements and at times its So, happens that your credit requests are also not entertained. They are at times refused also that is why we shall also be talking about refusal letter. And then if the credit has been granted and the goods have also been received, but then as an organization you want the money to be collected from time to time even though having a sound business relationship with each other, it has been seen that because of some problem or the other because of some deadlock because of some difficulty because of some crunch whatever way it is, sometimes some organizations feel that they are not in a position to grant the credit and they have to refuse. But then even when they have to refuse the credit, they do not want to lose the customer because business depends on give and take it depends on credit and also on collection. So, from time to time in order to get the money you have also to draft collection letter and then we shall also be talking about sales letter complaint or claim letter and then adjustment letter. Now, all these letters as we have been discussing in the previous lectures all these letters even though their formats may be the same. They vary in their tones even when they actually catered to the requirements of a business, but then at times it so, happens that while you are approving a credit, you are granting a credit or you are refusing a credit the language changes and the language changes, depending upon the circumstances depending upon the needs. So, first we would like to know how to write a credit letter and when you want certain things to be given on credit, what actually are the requisites when you write a credit letter as you are well aware of the format as you know well that your business organization will have a letterhead and when you start depending upon the letter style that you ah follow in your organization, now you will start writing the letter. But before writing the letter, you actually have to find out certain things so that you are in a better frame of mind. Now, what are these requirements? First is you must know the source of information, where did you get the information about a particular item that you want to get from some organization. So, source of information about the product. You have come to know about a new product that has been launched and you know it either through a sales letter or through an advertisement or a through some website or through some channels or through some other people. So, first you have to know about the source of information from which you came to know about a particular product. And then as you are going to get things on credit, you have also to understand how you are going to order and when you are going to order you actually should know what are the requirements, what are the credit requirements of that particular organization because nobody can give you money greatest, nobody can give you nobody can grant you credit without any differences. So, there are certain formalities to be followed. What are those formalities? Some organizations see to it that they are not going to applies a new organization from which they do not have a business relationship. But somewhere or the other when business has to be started naturally sometimes you also come into contact with new organizations. Both of us I mean both the granting organization and the organization which actually wants the credit, they must know each other and every now and they cannot know each other themselves. They have to provide some references So, essential information about the business that also you must know I mean the terms of agreement the terms of contract, what are the rules in the organization and where does your company suit in or your organization can peel itself to be a suitable one and then the references. Who are the references? References matter not only in business references mattered in jobs also even when you are writing a job letter, there also you require same references because nobody will trust you unless and until your claim or your credit has been validated by because business organizations say to it that their money does not get a stuck, otherwise the entire business will come to a halt. So, credit references are important. And then at times the willingness to supply further information if required to establish financial credibility. For example imagine that yours is a new organization. You have also provided some credit references, but then the other organization wants to know that in case of a deadlock in case the amount is held for a long time, what are the assets to this organization. So, that the amount given on credit can be recovered or can be collected. So, all these are very important my dear friends and these are the requisites of a credit letter. So, before writing a credit letter, you must see that you fulfil or your organization fulfils all these requirements, but then when you write a credit you must not be under the impression that every now and then your credit will be granted or you have asked for a credit maybe the credit is refused. But when an organization refuses a credit, the organization does not want that the customer is lost because every organization wants to have a sort of business relationship. Suppose one organization has got a lot of things to sell because the other organization wants to sell and selling always does not depend on cash. Sometimes the credits are also important, maybe once you give things on credit. Next time, they will start paying you in cash. So, it actually depends upon a number of factors, but then sometimes because of some problems as I said previously sometimes you are not in a position or your organization is not in a position to grant the credit. So, in that case you are going to refuse the credit. So, when you are going to refuse the credit, so what actually will be the format will be the same, but as I said earlier the language will be a bit different language will be business like no doubt ah. But then you actually have to tell them clearly that you are not able to grant the credit. Sometimes the reasons may be valid also sometimes you really are in a problem and you do not want to entertain, but even then not entertaining does not mean not retaining the customer. We have to retain the customer. So, even when you are going to refuse the credit, what you must do is first you must have in your mind that you are going only to refuse the credit, you are not going to refuse the organization or you are not going to say a goodbye to the organization. So, express cordiality for credit requests. I mean every business letter begins with one thing that is appreciation. This appreciation is actually a token that two organizations are having a sort of business relationship. So, express cordiality for credit request. So, the first line that you will write will be the expression of cordiality and then because you are not going to grant them credit, you are actually to mention the reasons why; why you are not in a position to grant the credit. So, express the reasons for refusals and then since you do not want to lose the customer, what you are going to do is you are actually retaining the customer or you try to retain the customer by encouraging to pay in cash for the present transaction. Maybe you can say at these hour you are not in a position to grant the credit So, what you do is you are actually encouraging the other party or you request the other party to pay in cash for the present transaction. And then, you should also suggest the possibility of making credit arrangements in future because you know the present times may be tough, but the times that are going to come may become easy maybe better, may there be some feasibility so, that you can provide them the credit request. Suppose somebody writes you a letter of credit for giving them things on credit in the month of February and you have a genuine problem because you want everything to be cleared by March and you know about the other organization that they cannot pay by March. So, at that time you have every reason to refuse the credit. So, when you refuse the credit, you tell them the valid reasons that way neither your customer will feel different nor you will be able to hide something. So, do not hide rather tell them what are the real reasons. Now, when you are going to write a credit letters you should actually be quite aware of the language that you are going to use. Whether it is because of some valid reason even though you must write a language that is business like for example, look at this sentence. We must deny your credit application because your record shows a history of late payments. Now, look at this sentence. This does not sound business like. This actually appears as if you are alleging the other party as if you are telling them even though you may be right, but then this is not the way because language plays a very important role in business transactions. So, such sentences ought to be revised and even at times some people who are writing for the first time you know especially for business, they are new to this correspondence. They must realize and they must change and they can always say as per the company policy timely and regular payments qualify for grant of credit applications. So, this sentence tells exactly that you are having a sort of correspondence with a new organization where you are telling them about the company policy; had this relationship been stronger and had this been older and more intimate perhaps the language could have been somehow different. Now, look at the second sentence. Frankly we like a resume this is about a resume a at times you also send a resume and sometimes you feel that even though your resume was very important, your resume was very strong; they did not call you. So, even when you are not in a position to call, then the language ought not to be like this. Frankly, we like your resume, but we were hoping to hire someone a little younger who might be able to stay with us longer. Now, this sentence actually ease a sort of allegation or ease a sort of attack at somebody’s age. I mean we should not consider anyone not to so or not to prove his calibre because of the age. So, what you can do, how you can reframe this sentence ah? You can say we appreciate your resume; however, presently we are looking for fresh graduates who are proficient in dot net. Now here you are specializing that somebody you want to hire should be having some qualification in dot net. Now, look at the last sentence. Last sentence because of the holiday period, all our billboard space was used this month. Therefore, we are sorry to say that we could not give you charitable group free display space; however, next month after the holidays we hope to display your message as promised. Now, see this sentence not only is longer, but this sentence again you are actually refusing an older customer. So, this you can change and how you can change? You may be telling them the reasons, but then you will be telling them reasons in a manner all the billboard space was used this month because of the holiday period and you have to retain them. So, you can say; however, you will be getting or your message will be published, your message will get a space next month as promised. So, by saying all this, you are actually retaining your customers. Now, here is actually an example of a simple refusal letter as we have discussed earlier the tone and the language because the language will be more polite extra polite. So, have a look at it. Thanks for your letter dated this and this and your inquiry regarding your credit order for 20 ASUS VivoBook laptops. Now, see this is actually an order for 20 laptops. You neither want to lose this customer, but then at this time you are not in a position to pay them or to provide them goods on credits. So, what the letter writer had said? The letter says it is a matter of utmost pride that we had maintained a very sound business relationship for the last 5 years. We also had a very transparent credit reputation with each other, but you see, but of late because of the market tumble. So, you are actually expressing the reason. So, because of the market tumble, we are encouraging all of our clients to pay us in cash. So, you are not the only one to whom we want to pay in cash. So, you are telling them that this has actually some reason behind and that is why you say moreover since you want to retain the customer that is why you say moreover we are offering a 10 percent discount for our old customers for the advanced orders. So, in this situation, you are retaining them and you are retaining them by giving them some amount of concession as well, some offer also. And with this, you have been able to use a language that can retain the customer and the last line is very important. We look forward to hearing from you soon; I mean the hope is still alive. So, you have even though you have refused, but then you have retained the customer my dear friends. So, then, but then sometimes every now and then you cannot refuse, sometimes you give them credits also. But as you give them credits, you are also to be aware that you have to collect the amount. Every organization wants the money to be collected and for that you have to write collection letter. Now, collection letter as i said in the beginning collection letters tone will change with every letter or the tone will change because you may have to write a series of letters in this regard either the other organization is facing some financial problems or maybe there are some other reasons as well. But then your main concern is how to recover your money, how to get back your money and that is why you may have to write several letters. And the letters will differ from each other, I mean the letter of the first the language of the first letter may be very gentle and as it grows, I mean if you have to write several letters; the second letter will be less mild no.  And if you have to write the third letter naturally that third letter will be harsh and then that is why I say from light to stern; the tone will be from light tone to stern meaning thereby from a gentle tone to a stern tone. So, it will start from gentle of course, here you cannot write an indirect message, you have to write direct message because the main concern is to get back the money. Although you have had a very sound relationship and it was because of the sound relationship that you maintained you have given them things on credit, but then now while you are going to recover the money, you have to see that your tone even though it gentle, but it is direct and the conclusion of a collection letter will be very strong even though it will be direct. Now, we will also see the examples of some collection letters. So, that you can have a real feel of it because every organization from time to time has to draft collection letters and you never know may be you have to write that collection letter. Even though the task is not always pleasant, it is challenging and a challenging task can be done only by a person. A challenging letter can be written only by a person who is himself courageous and who not only has got a control over language, but also knows how to get the money back. So, let us come to see what the first letter says this is the first letter. Have a look at the tone. Now I have intentionally left the letterhead which will be here as you all know are the letterhead will be here fine and as a formality, we will be there even though you are going to write a letter direct that does not mean that the letterhead will not be there and the date line will not be there, the subject line will not be there; all these things will be there. Now, I have simply given you the body of the letter. I mean you start with a salutation whatever it is that is why I have left it open. Dear Mr such and such dear Mr. Pankaj, a dear Mr. Assignee is not it. So, depending upon your business relationships, hope you remember our previous dealings. So, you are referring to the previous dealings. So, straightaway you are not coming, but then in the second sentence you are making it a bit clear of late we have neither heard from you nor received any orders. So, you are now going to tell them. So, you have now not received any orders, your main intention is that your money is outstanding. But then you are saying not received any orders and after this, you will actually be more specific as a reminder now since you have already sent the reminders. As a reminder, our credit terms are usually of a month. Now you are going to the agreement when the two companies signed an agreement between the two for business dealings, then it was actually a month’s time to be given in order to pay the credit or in order to clear the credit. So, now you are reminding them. The previous credits are yet to be paid; see the language gentle, yet to be paid and this affects business relationships. So, you are intending that maybe in the days to come our business relationships will be sour is not it credits which become outstanding for more than a month are subject to 5 percent interest. So, in the first letter, you are already mentioning that if you are if you have already been neglecting this for a month, you are bound to pay 5 percent interest. Maybe sometimes because you do not want to pay the interest the money will come back on the principal amount. And look at see look at the last lines, we expect the credit amount to be cleared soon to cause any further inconvenience. So, the language becomes very direct and then again because you have to return. So, you say in case of any clarification please feel free to call on my personal number as a sales manager as an accounts officer, you actually want them maybe you want to know the real problem where lies the real problem that is why you say they can call you on your personal number. So, this is the first letter, but my dear friend after writing the first letter money does not come and hence you are bound to write the second letter. So, I am excluding that second letter because you know the tone will be harsh and in the second letter, you will mention the amount and the amount outstanding is 65000 which is actually a big amount for an organization. So, we straightaway come to the third letter is not it and in the third letter you see how the language changes; nothing no thanks nothing. We are extremely pained, you see we are extremely pained to note that an outstanding credit of rupees such and such a stand spending against your firm. In business such credits become a liability. So, the language has the language not become harsher, yes it has and this letter is a bit shorter fine. So, what we say here we would be happy to answer any queries in this regard even though you have been harsh in the first paragraph, in the second you become a bit gentle because you have your money thing in your mind. In addition, we expect the check as early as possible. So, the language is threatening, the language is less milder, but then your main concern is money. So, after having sent the third letter and waited nothing comes so, now, you are going to send them the last letter. And in the last letter, you actually become more threatening more intimidating and naturally the language of the last letter will be very harsh I mean I have called it the final letter. And what should be the final letter like? Now you see even in the final letter no more curtsies; curtsies also have a limit. And after a certain amount of time when the limits are crossed my dear friends and the real business comes into shape. An outstanding amount of rupees such and such has not been paid despite several requests. Now, you are creating a background because you are now going to hand over the matter to a legal advocate or whosever because it is a question of money. So, in a way you are indicating and that is why the language you see has not been paid fine. Sometimes you can also say you have not paid an outstanding amount of such and such. This reflects very poorly on your business relationship with us on your business relationship with us, is not it. And then in the second para which is a bit shorter, financial negligence as per our agreement is bound to terminate you see the use of the word terminate; terminate in our business relationship. This will damage your reputation and force us to seek legal help in this matter. So, when you mention the use of the word legal help, the other organization actually becomes very conscious and maybe we can hope that after this letter, you will get your money back. And so, the final ah line that you are saying I hope you will avoid this embarrassment and send the check without any loss of time and here you also mention the date latest by 25th December 2017 because this actually is a deadline. And by maintaining the date you are also telling them that after this perhaps the matter will go to court and this actually is a sort of intimidation based on which the money will come and your check either will be sent or some other settlement done So, my dear friends my intention behind these lectures are to tell you that since in business goodwill is very important, but then at times this goodwill is also forsaken, but then you do not want to lose the customer you want to retain and that is why you have to be very careful, you have to make use of your own discretion while you are writing. Sometimes you are gentle, but sometimes you are harsh because it is a question of money and business runs on money So, having said that we can see that today we discussed not only the types of letter and in that we talked about credit letters and collection letters. And in the lectures to come we shall be talking about sales letter, then complaint letter and adjustment letter. So, I hope you are in a better frame of mind to draft credit letters and query letters, refuge letters and then collection letters. So, with this we come to the end of lecture. I thank you very much and wish you all a very good day.  One later that actually is still remaining is recommendation letters ah, but then I think our time is falling short, but then I would like to focus on two three things. Whenever you are going to write recommendation, letters please see that you maintain honesty, confidentiality. You have estimated a candidate because from time to time in business as an academic institutions also, some people give your names as referees and you have to draft recommendation letters. So, while drafting recommendation letters, you are actually to tell them the truth. So, very in a very short amount of time that we have on our disposal, let me straightaway come to a sample recommendation letter. So, that it may give you a clue about how you can be honest, but at the same time you have to praise the candidate. So, that your recommendation provides him a job. State the purpose of the letter mention the amount of time for which you know this candidate and then discuss the merits of the candidate, also talk about in case they need some more information, then you can also provide them. So, I have provided recommendation letter as a sample, you can have a look at that and you can read so, that you can get ah to know how to write a proper recommendation letters. Here you will find, it is a recommendation letter which can be given for a candidate who has applied somewhere for the post of assistant professor and there the writer of the recommendation letter will attributes some of the major points. For example you see Ms. Jasmine is well read in her field and her work on women antigens in Rajasthan is a significant contribution. So, you are talking about contribution, then you are also talking about her command over an area of expertise came to light when she excelled as a teaching assistant after her PhD. And then you also talk about her teaching abilities as you say her responding to students carries patiently using interactive approach and modern day teaching learning methods. And then finally, in the last paragraph you mentioned, I believe that doctor jasmine can contribute both to academia and research most efficiently. And the last line that you write, I recommend her for the post of assistant professor and we share all this success in her future ventures. So, this is actually recommendation letter which is for the position of an assistant professor. Sometimes you may also be asked depending upon what position you are in and in what organization, you may be asked to write recommendation letter for various positions to people for people whom you know. So, this is actually just a sample and based on this you can also write a recommendation letter. Till then I recommend you to go through this lecture very carefully because this is not only technical in nature, but then this can enrich a lot of information are to you. Thank you very much, I wish you all a good day.