Commercial_Correspondence

251 rue des Raimonieres

F-86000 Poitiers Cedex

Telephone (+33) 2 99681031

Telecopie (+33) 2 74102163

Email p.gerard@disc.co.fr

Ref. PG/AL

3 December 20—

Herr R. Gerlach

R.G. Electronics AG

Havrnart 601

D-50000 Köln 1

Dear Hen Gerlach

I intend to place a substantial order with you in the next few weeks and wondered what sort of credit facilities your company offered?

As you know, over the past months I have placed a number of orders with you and settled promptly, so I hope this has established my reputation with your company. Nevertheless, if necessary, I am willing to supply references.

I would like, if possible, to settle future accounts every three months with payments against quarterly statements.

Yours sincerely

P.Ora rd

P.Gerard (M.) Manager

8

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Refusall of evecil'K

a,

fEerlIESIGS

In this reply, R.G.

Electronics turn

Disc S.A.'s request down, even though the two companies have traded for some time.

8

Example letter

R.G. Electr ICS AG Havmart 6oi

D-50000 Kean

Telefon (+49) 221 32 42 98

Telefax (+49) 221 83 61 25

Email gerlachr@rge.co.de

www.rge.de

Your Ref: PG/AL

8 December 20—

M. P. Gerard

Disc S.A.

251 rue des Raimonieres

F-86000 Poitiers Cedex

Dear M. Gerard

Thank you for your letter of 3 December in which you enquired about credit facilities.

We appreciate that you have placed a number of orders with us in the past, and are sure that you can supply the necessary references to support your request. However, as you probably realize, our products are sold at extremely competitive prices. This allows us only small profit margins and prevents us offering any of our customers credit facilities.

We are very sorry that we cannot help you in this case and hope you understand our reasons.

Once again, thank you for writing, and we look forward to hearing from you soon.

Yours sincerely

qeriark

R. Gerlach

Sales Director

1 How does Herr Gerlach assure M. Gerard that his

firm's reputation has nothing to do with the rejection?

.

Edit View :.Insert Forittat Toole ACtions -Help.„

I I John Merton

Subjebt: Terms of payment

Dear Mr Merton

Our bank has advised us that the proceeds of our letter of credit against your invoice, No. G1197/S, have now been credited to your account.

Although we have paid for some time on this basis, it does not really suit our accounting system, and as we feel you know us well enough by now, we would like to make future payments on quarterly statements by international banker's draft.

If you require a reference, please contact either Mr M. Pierson or Mr J. Tane at our other suppliers, Pierson & Co, Louis Drive, Dawson, Ontario, who will be happy to vouch for us.

Please confirm that these new terms are acceptable to you.

Richard MacKenzie

Dear Mr MacKenzie

Thank you for your email of 9 February in which you asked to change your terms of payment to settlement by banker's draft on quarterly statements.

We are taking up the reference you offered, and provided it is satisfactory, you can consider the new arrangement effective from your next order.

John Merton

Sales Manager

Glaston Potteries Ltd

Clayfield, Burnley BB10 1RQ

Tel: +44 (0)1282 46125

Fax: +44 (0)1282 63182

Email: j.merton@glaston.co.uk

Request fog as change in the terms of payment

As we have seen in previous units, MacKenzie Bros of Canada import chinaware from Glaston Potteries in England. They currently pay

by letter of credit

r see pages 68 and 85,

but now want to pay on quarterly statements by international banker's draft.This involves fairly long-term credit, so they supply references.

ikiotificatim of taking up references

Glaston Potteries are

sympathetic to Mr

MacKenzie's request, but

decide to take up the

reference offered.

8

sHeuia aidulex3

ASKING ABOUT CREDIT RATING

The guide below gives you an outline of how to take up references and to ask about a company's

Opening

Say who you are and why you want the information. Make it clear that the name of the company you are writing to has been given to you as a reference by your customer. If this is not the case, you are unlikely to get a reply p>see page 127.

— We are a furniture wholesalers and have been asked by L. R. Naismith & Co. Ltd of 21 Barnsley Road, Sheffield to offer them open account facilities with quarterly settlement terms. They have given us your name as a reference.

— We are a glass manufacturers and have recently begun to export to the UK D. R.

Mitchell & Son, who are customers of yours, have placed an order with us, but want to pay by 3o-day bill of exchange. They have informed us that you would be prepared to act as their referees.

—Your branch of the Eastland Bank was given to us as a reference by ITS. Ltd, who have placed a substantial order with us, and want to settle by 4o-day draft. Could you give us a guide to LT.S.'s credit rating?

Details

Say exactly what you want to know.

—We would like to know if the company is creditworthy and has a good reputation.

—We would be grateful if you could tell us if the company is reliable in settling its accounts promptly

—Could you let us know if this company is capable of repaying a loan of this size within the specified time?

— Could you tell us if the company has a good reputation in your country; whether they can be relied on to settle promptly on due dates; and what limit you would place or have placed on credit when dealing with them?

If the amount of credit is known, it is usually mentioned.

—The credit will be about £6,000.

—We do not expect the credit to exceed £4,000.

—The draft is for £926.00.

—It is unlikely that they will ask for more than a £1,000 credit at this stage.

Closing

Thank the company in advance for giving you the information, and tell them you will reciprocate if the opportunity arises. Also, let them know that whatever they say in their letter will be treated as confidential.

—We would like to thank you in advance for the information and can assure you that it will be treated in the strictest confidence.

—Your help will be appreciated, and the information will be held in confidence. We will return the favour should the opportunity arise.

—We can assure you that the information will not be disclosed. Thank you for your assistance in this matter. If we can reciprocate in a similar situation, please do not hesitate to contact us.

Using an encfit,givy agency

Business associates may give more information than banks and trade associations, who will usually only give brief references >but see page 127. An enquiry agency will give much more detail about a company, and for a fee, will research its financial background, its standing, creditworthiness, and ability to repay loans or fulfil obligations. When writing to an enquiry agency, therefore, you can ask for more information.

—We have been asked by D. F Rowlands Ltd of Milton Trading Estate, Peterborough, to provide them with a credit of up to £5,000 by allowing them to settle by quarterly statements. As we have no knowledge of this company, would it be possible for you to give us detailed information of their trading activities over, say, the past three years?

— The company named on the enclosed slip has

written asking if we would allow them to settle by 6o-day bill of exchange. Our trading

with them so far has only been up to £1,500.00. As we know nothing about them or

their creditworthiness, could you investigate their business activities over the past few years and give us a detailed report?

REPLYING TO ENQUIRIES ABOUT

CREDIT RATING

In most countries there are laws which protect a company from having its reputation damaged by anyone saying or writing anything that could harm its good name, and this should be considered when giving details of a company's creditworthiness or commenting on its standing.

— Thank you for your letter, which we received today. Unfortunately, we know nothing about the company as our only dealings with them have been on a cash basis. We are sorry that

in this matter.

Sometimes you may simply not want to give any information about a customer, whether you know their reputation or not. In this case a polite refusal, generalizing your statements, is the best course of action.

—With reference to your letter of 16 October in which you asked about the credit standing of one of our customers, we regret that it is our

policy never to give information about customers to inquirers. As business associates of ours, we are sure you will appreciate this. Perhaps an enquiry agency would be more

helpful?

Replying unfavourably

Refining t© Teply

There are a number of reasons why you may not wish to reply to an enquiry. If, for example,

the company writing to you does not state that you have been named as a REFEREE by their

customer, and you do not want to risk offending a business associate, it would be better not to make any comment.

— Thank you for your letter concerning our customer, but we cannot give you any information until we get permission from the customer. Could you therefore ask the person mentioned in your letter to write to us asking us to act as referees? We would then be happy to give you the necessary information.

— As we have not been asked by the person mentioned in your letter to write a reference on their behalf, we cannot supply any information about them.

If you do not know enough about the company to comment, then it is better to say so.

—With reference to the company you mentioned in your letter of 9 October, we are

sorry to say we know little about them as we have only supplied them on a couple of occasions. Therefore we cannot give you any details of their trading record or credit standing.

If you give an unfavourable reply, do not mention the name of the company. Give only the facts as they concern you. Do not offer opinions, and remind the company you are writing to that the information is strictly confidentian is advisable not to use an open system like fax or email for this kind of

communication.

— With reference to your letter of 19 April in

which you asked us to act as referees for the customer mentioned, we have only dealt with

them on a few occasions but found they tended to delay payment and had to be reminded several times before their account was cleared. But we have no idea of their trading records with other companies. We are sure you will treat this information in the strictest confidence.

— In reply to your letter of 14 September concerning the customer you enquired about,

we regret that we cannot recommend the firm as being reliable in their credit dealings, but

this information is based only on our own experience of trading with them. We offer information on the strict understanding it will be treated confidentially

LetteEr to a crefevee 1

As notified in their email i>see page 125, Glaston Potteries take up the reference offered by MacKenzie Bros.

8

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129

I am replying to your enquiry of 16 February in which you asked about

MacKenzie Bros of Dawson, Ontario.

I contacted them yesterday and they confirmed that they wanted us to act as their referees, and I am pleased to be able to do so.

The company has an excellent reputation in North America for both service and the way they conduct their business with their associates in the trade.

We have given them credit facilities for at least ten years and have always found that they have paid on due dates without any problems. I might also add that our credit is in excess of the one mentioned in your letter.

You can have every confidence in offering this company the facilities they ask for.

Yours sincerely

Malcolm, P i,exo

Malcolm Pierson

Director

Telefono: +39 (o)6 769910

Telefax: +39 (o)6 6815473

Email: causiod@satex.co.it

Via di Pietra Papa, 00146 Roma

Vs. rif.:

Ns. rif.: DC/AA

4 July 20—

Mr T. Grover

Grover Menswear Ltd

Browns Lane

Rugeley

Staffordshire WS151DR

Dear Mr Grover

Your name was given to us by Mr L Crane, the chief buyer of F. Lynch & Co. Ltd, Nesson House, Newell Street, Birmingham B3 3EL, who have asked us to

allow them to settle their account by 40-day B/E.

They told us that you would be prepared to act as their referee. We would be grateful if you could confirm that this company settles promptly on due dates, and are sound enough to meet credits of up to £5,000 in transactions.

Thank you in advance for the information.

Yours sincerely

Daicde, Cafksio

Daniele Causio

Sales Director

Letter? to a veaves 2

Here is another example of taking up references, this time from Satex, the Italian manufacturer we have met in previous units.Their customer,

F. Lynch & Co., asked to be allowed to settle their accounts by 4o-day bill of exchange, documents against acceptance

.see page 84. F. Lynch & Co. offered references, which Satex are taking

up.

n

8

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3

m

I

kefenes ve[olly 2

Note how Mr Grover says he will take no responsibility for how the information he provides is used, and reminds Satex that the letter is confidential.

8

Example letter

Grover

D enowear

Browns Lane

Rugeley

Staffordshire

ws15 1DR

Telephone +44 (0)1889 431621

Fax +44(0)1889 431622

Email tgrover@mensweanco.uk

9 July 20—

Mr D. Causio

Satex S.p.A.

Via di Pietra Papa 00146 Roma ITALY

Dear Mr Causio

We have received confirmation from F. Lynch & Co. Ltd that they want us to act as referees on their behalf, and can give you the following information.

We have been dealing with the company for ten years and allow them credit facilities of up to £4,000, which they only use occasionally as they prefer to take advantage of our cash discounts. However, we would have no hesitation in offering them the sort of credit you mentioned, i.e. £5,000, as they are a large reputable organization and very well-known in this country.

Of course, we take no responsibility for how you use this information, and would remind you to consider it as confidential.

Yours sincerely

7groves

T.Grover (Mr)

Director, Grover Menswear

1 What did Mr Grover do before contacting Satex?

2 What expression is used to mean for them?

3 Why does F. Lynch & Co. only sometimes use Grover Menswear's credit facilities?

4 How does Mr Grover explain that his company will not be liable for Satex's decision?

5Which words in the letter have a similar meaning to the following?

a trading with b respected

c private