Acknowledging Receipt of Payment

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

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

Specimen letters

I. Acknowledging Receipt of Goods

Dear Sirs,

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

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

Yours faithfully,

Encl.

II. Supplier Asks for Details of Invoice Paid

Dear Sirs,

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

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

Yours faithfully,

III. Publisher of Textbooks Corrects Error in Invoice

Dear Mrs Robinson,

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

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

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

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

Sincerely yours,

VII. Credit Letters

Credit Inquiries and Credit Information

Credit Inquiries

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

The most important credit information sources are:

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

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

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

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

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

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

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

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

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