Business Communication I Notes: Business Letters and Memo Formats | Office Memorandum

Business Letters and Memo Formats
Business Communication Notes

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In this Article, You will Business Communication notes – Business Letters and Memo Formats. For More notes on Business Communication visit our blog regularly.

Table of Contents – Business Letters and Memo Formats

1. Business Letter: a) Meaning of Business Letters b) Purpose or Functions of Business Letters c) Essentials of Goods Business Letter d) Components or Stages of Business Letters e) Difference Between Business Letters and Other Letters 2. Memo or Memorandum  or Office Memo a) Meaning of Memo b) Advantages and Disadvantages of Memo c) Difference between Business Letters and Memo 3. Sales Letters and Its Importance 4. Collection Letters and Its’ Nature 5. Good News letters and Bad New Letters

Business Letter - Meaning

A letter is price of conversation by post. It is the most important means of written communication. Every organization has to maintain contacts with its customers, suppliers, Government Department and so on. The organization has also to exchange information with various parties. Placing orders, soliciting enquires, executing orders etc. require communication. For such type of communication the media used by the organization is a letter. This letter is known as business letter.

In the words of H. A. Murphy and others, “The medium used most often for written messages to persons outside your organization is the business letter.”

W. J. Weston said, “Business letter is the process of accomplishing business transaction in written form.”

 The functions or purposes of a business letter

Business people have to communicate with the suppliers, debtors, creditors, customers and with other concerned parties to exchange information. Business letters are basically used to communicate with the above parties.

According to Ricks and Gow, “The primary purposes of business letters are to inform, instruct, request, inquire, remit, order, advice, correct and to question.”

Purpose of Business Letter

1. Convey information: The basic purpose of any business letter is to convey information regarding business activities. Information can be transmitted through business letter to customers, suppliers, debtors, government authorities, financial institutions, bank and insurance companies and to any other parties related with the business.

2. Conclude transaction: This is one of the specific purposes of business letter. To conclude in completed transactions business letters are frequently used.

3. Creation of demand: Business letters especially circular letters used to create demand for new products. Circular letters can communicate many people in the same time.

4. Creation of goodwill: In this electronic era messages can be sent within few seconds through electronic media but a well decorated business letter has its own importance in creation positive image of the company.

5. Expansion of business: Through goodwill messages and through circular letters existing market can be expanded.

6. Establishment of relationship: Another important purpose of business letter is, it helps to establish mutual relationship with the customers, suppliers and with the other interested parties.

7. Evidence: Business letters are also used to maintain documentary evidence. Letters can be preserved for future reference.

8. To inquire: A business concern not only sends messages but also receive information from the outside. To run the business any firm need different types of information from outside. Through business letters firms can inquire regarding necessary matters.

9. Placing order: It is a very common purpose for using business letter. Both trading and manufacturing concerns need to place orders for finished goods or raw-materials to run the business.

10. Problem solving: In the course of business, disputes and misunderstanding may arise. Business letters play vital role in solving such misunderstandings.

Essentials for a good Business Letter

Business letters are an important part of any business or profession. They are written to different persons with different motives. Letter writing is basically an art. The writer can cultivate a good style of writing various business letters by a constant and regular practice. Below are mentioned some of the important features which should be closely followed by a letter writer:

1.       Clarity: A letter must have clarity. The purpose of communication should be made clear. Whether it is to inform, invite, reiterate, emphasize, remind, announce, seek participation or clarity and correct the earlier message, the purpose should clearly be stated. Lack of clarity affects the intended purpose of the letter. A letter writer should be conscious and exercise due care.

2.       Impact: The letter should create the necessary impact. Behind every letter there is an objective and the letter should have a clear purpose. The purpose of writing a letter is not just to reach out to the customer. Every letter has an intended impact which must be felt.

3.       To create the desired impact, it is often necessary to lay emphasis. Emphasis can be laid in many ways. It can be done by proper positioning—placing them in an important position. It can be done by repetition.

4.       Relevant Information: The letter should provide the relevant details forming part of the message. Facts, figures, illustrations and other such information, which are accurate and reliable, as well as relevant to the context of the communication, should be incorporated in the letter.

5.       Brevity: Any good communication—oral or written—should necessarily incorporate this essential feature. Brevity is a very important attribute for any business letter. For everyone connected with business, time is of essence.

6.       The time that one can allot for reading business letters is certainly limited. The receiver does not have unlimited time to spare towards reading and re-reading the letter and drawing out the message in its entirety.

7.       Simplicity: Simplicity is the hallmark of any good communication. Simplicity refers to the ease of understanding. Simple writing is the opposite of complex and involved writing. The art of simple writing is mastered through conscious effort and practice. A letter written in a simple, easy, informal style using easily understood words catches the attention, and makes an impact.

8.       Timeliness: Business letters, to be effective, should have proper timing. Letters should be written and dispatched on time. Some messages have a sense of urgency. They call for action, which is ‘immediate’ or ‘urgent’, or within a given time frame. Letters which carry such messages should reflect the associated urgency.

9.       Language: Language is an extremely important facet of business communication. First and foremost, it is necessary to ensure that the language used is appropriate, i.e., the language with which the reader is at ease. Apart from English and Hindi, various regional languages are in common use in businesses in different parts of the country. Public sector organizations such as banks follow the three-language formula.

10.   Appeal: A good letter should appeal to the reader’s sensibilities. It should go beyond the message it conveys and make a good impression. It should have elegance, which means taste, beauty and decency.

11.   Style: Style refers to the manner of writing. It constitutes the collective characteristics of the writing or impression or way of presenting things. Each person has an individual style. The writing style, to create an impact, again needs conscious effort, on an ongoing basis.

12.   Positive Approach: A good business letter, in the ultimate analysis, is that which has a positive approach. It creates a friendly atmosphere. It avoids negative feelings. One must be in a proper frame of mind to write a really good letter.

Components or Stages of a Business Letter

The components of a letter constitute the different parts of a letter. The following parts usually constitute the structure of a business letter.

1. Heading: The heading which is also known as „head address‟ or “letter head” contains information relating to the name of the organization and its address. It is usually given at the top centre or top right side of the paper. Following information’s are provided in the heading.  The firm’s name, address, trade mark, telephone number, telexes number, Ethics-mail address etc.

2. Reference Number: The number which the receiver refers in all future correspondence is called reference number. It is usually printed below the date line or on the same line where the date is written to the right margin. The purpose of reference number is to enable replies to be linked with the previous correspondence and to send replies to these letters to the proper official or department.

3. Date: The date consists of day, month and year. The date finds its place either at the starting of left margin or at the closing of the right margin as the style adopted. Date enables quick references in future and helps in prompt action and orderly filing.

4. Inside address: The inside address contains the name and address of the organization or the individual to whom the letter is written. It is written below the reference time starting from the left margin. The inside address makes a record on the copy which helps in identification for filling purpose.

5. Attention line: Attention line is placed below the attention time and above the salutations and is underlined. It indicates the name of those for whom the letter is meant.

6. Salutation: Salutation means to greet the addressee. It is the complementary greeting with which the writer begins his letter. it is written below the inside address or attention line leaving some space. It starts from the left side margin. It may or may not end with comma depending upon the style of the letter.

7. Subject line: Subject line tells what the correspondence is about. It is placed just below the salutation line. It usually begins at the left margin and may also begin from the centre. It may contain apart from the subject any specific identification material i.e. date of previous letter, invoice number etc.

8. Body of the letter: It is that part of the letter which contains the message to be converged. It is the most important part of the letter and usually consists of three to four paragraphs.  

The first (or the opening paragraph) begins the letter and builds up a relationship with the reader.

The second paragraph contains the proper subject matter. It is the main paragraph of the letter.

The third paragraph is an extension of the second paragraph.

The fourth (or the closing paragraph) brings the letter to an end. It must be natural and logical must be final and complete.

Closing with an important statement, a question, an offer or a request leaves the door open for further communication.

9. Formal Close: It is also known as subscription. It is merely a polite way of ending a letter. It is written below the last paragraph of the body of the letter, either at the left side or at the right side, depending on the style of letter. The subscription should be corresponding to the salutation.

10. Signature block/slot: Signature is the assent of the writer to the subject matter of the letter and is a practical necessity. It is usually hand written and contains the writers name, status, department, firm etc. Signature is put just below the complementary close.

11. Enclosures: Sometimes some documents like price list catalogue etc are attached with the letter. Enclosure mentions the documents which are enclosed or attached with the letter. The enclosures usually find their place at the bottom left margin.

12. Postscript: It is commonly known as is something written after the letter is closed. It is usually done when the writer forgets to put in some information or message in the main part. It should be very precise and to the point.

13. ‘CC’ or Carbon Copy notation: When copies of the letter are meant to be sent to more than one person it is mentioned under “CC” or carbon copy notation.

14. Reference initial: When typed initials are put it refers to reference initials. These are useful for office checking. They are typed adjacent to the left margin.

Difference between Business letter and other letters

1.       Nature: Business letter or commercial letter it is impersonal and universal in nature. But other letters may be fully or partly personal in nature.

2.       Purpose: Business letter is exchanging various business related issues and information. But other letters are mainly exchanging personal or family related affairs and information.

3.       Scope: Business letter scope is wide and contains various types of business information. But Scope of other letters is limited and contains only personal information.

4.       Structure: Business letter follow officially recognized structure. But other letters may or may not follow any recognized structure.

5.       Formality: Business letter it maintains formal rules and procedure. But other letters may be informal.

6.       Size: Business letter generally it is concise in size and avoids irrelevant matter. But other letters may be concise or large in size.

7.       Types: Business letter it can be categorized differently. But other letters generally cannot be categorized.

8.       Language: Business letter language should be easy and simple. But other letter’s language may easy, poetic, emotional etc.

9.       Copy: Business letter copy of business letter is preserved. But Copy of other letters may or may not be preserved.

10.   Method: Business letter it uses direct and persuasive method. But other letters may use only direct method.

Office Memorandum or Memo or Memorandum

Memorandum is popularly known as memo. The literal meaning of the word memorandum is a note to assist the memory. Memos are the written internal communication means for exchanging information relating to day-to-day functions within the organizations.

According to Lesikar and pettit, “Memorandum is a form of letters written inside the business”.

According to Stewart and Clark, “Memos are used to communicate with other employees, regardless of where the employees may be located in the same organization.”

According to S. Taylor, “Memo is a written communication form one person to another (or a group of people) within the same organization.”

So, memorandum or memos are an internal short note or letter in which information exchanged among superiors and subordinates or same potion of employees in the organizational structure.

Advantages of office memo

We know memorandum serves various purposes. It is a common means of writer, communication within the organization. The main advantages of memos are discussed below:

1.       Time saving: We can see that may organizations use printed memo. As it is usually printed, it takes less time to draft it.

2.       Less formality: No formality is necessary in drafting a memo, usually inside address, salutation and complimentary closing is omitted in it.

3.       Maintenance good relationship: It can help to maintain the good relationship among the boss and subordinates, because the bossing attitude is absent here.

4.       Low cost: The cost of communication through a memo is less than those of others.

5.       References: Memo is a written document. So, it can be used for future references.

6.       Inform the decisions and actions: The main objective of memo is to inform the decisions and actions. For this purpose, it should be written by the higher authority.

7.       Request the decisions and actions: The objective of memo is to request the decisions and actions. For this objective, it may be drafted by the sub-ordinate.

8.       Provide information: Another important objective of the memo is to provide information form one level to another within the business.

9.       Remain someone of action: Memo is also written to remind someone of action, if requires.

10.   Others: Issuing orders and instructions, providing response, providing suggestions, presenting informal report, solving problems.

Disadvantages of office memo

There are few limitations or Disadvantages of memos they are:

1.       Limited application: It is not widely used means of communication. Memorandum is mainly used in business firms. It maintains communication only among the employees of the same firm regardless of distance.

2.       Time consuming: It takes time to be sent to a distant branch or office.

3.       Expensive: As usually a memo is a per-printed form, it is expensive than other means. Sometimes huge printed memos remain unused.

4.       Lack of formality: It provides only informal communication.

5.       Lack of explanation: Memo is written in a short form. So the meaning of it may not be cleared to the reader.

6.       Less important to the reader: As it is an informal means of communication, it can be less important to the reader.

7.       Not suitable for illiterate people: Office memo is a one kind of written communication. So, illiterate people are not able to read and understand it.

Differences between memos and business letters

1.       Memos are never sent out of the company or organization, but letters can be both sent to recipients within the organization or outside the organization.

2.       The information in a memo is concise and straight to the point. A memo will only focus on the most pertinent issues. But letters on the other hand are more detailed and often elaborate more on the important issues to be done or addressed.

3.       Memos are very short; letters are generally lengthier than memos.

4.       Memos are normally sent to the recipient(s) by the organization’s messenger, but letters are normally put in envelopes and posted via mail.

5.       Memos do not contain addresses, but business letters must contain addresses. In a business letter both the sender’s address and the recipient’s address must be put.

6.       A letter can be more private than a memo.

7.       Last but not least, the features of memos are massively different from the features of business letters.

The above-mentioned are the common differences between memos and business letters. Both memos and letters are used frequently in every well organized business organization.

Sales Letters and Its Importance

Although the primary aim of sales letters or offers is publicity yet it is the most important written form of business communication. It reaches out to a large number of people interested in a particular product or service and turn them into buyers. Even if people are not interested in the product, them the aim of this letter is to make them interested in it. Starting with the assumption that the receiver may resist the offer, the sales letter has to be persuasive or powerful enough to make recipient act. They are unsolicited letters, mostly written by professional writers. The effectiveness of such letters depends on the writer’s ability to use language suited to his purpose that is above all to influence the recipient – his thinking, taste and behaviour. This is the aim of persuasion. Sales letters are, therefore, persuasive or indirect approach letters.

Sales letters are the best way for approaching to the prospective buyers indirectly. These letters are an easy and effective way of securing business. No other type of letter influences so many people or brings as big a return in terms of money as this letter.

Importance (Objectives) of Sales Letters:

Sales letters are part of the publicity – cum – advertisement campaign for a product or service. When compared to TV, Cinema, newspaper, magazines, handbills, direct marketing and window displays which are the other forms of publicity and advertisements, sales letters have the following advantages:

1.       Personal touch: Sales letter can add a personal touch to advertising which is not possible in other forms of publicity and advertising. It also keeps the customers constantly in touch with the company and its products and services.

2.       Direct communication: It can be sent directly to prospective customers.

3.       No competition: The messages in the sales letters do not have to compete with other advertisements unlike TV and newspaper advertisements where ads of various competitors are shown.

4.       Goodwill: It creates and Maintain goodwill among the customer by offering quality products and services.

5.       Convenience: Unlike TV and Cinema advertisements sales letters can be set aside and read later at leisure.

6.       Cheaper: It is less costly as compared to other forms of advertisement.

7.       Easy assessment of effect: As they are sent to a definite number of persons who are classified into demographic groups based on age, income, profession etc. their effect can be accurately measured.

8.       Quick: Unlike sales representatives, sales letters get quick, direct access to the target person.

9.       Wider Area: Sales letters that are posted can reach remote areas which are not possible in case of modern means of advertising and promotion. It widens the market for existing products without much cost.

10.   Mail order business: It is the main source of securing orders for a mail order business.

11.   Customer education: it educates the customer in selecting the right type of goods and services.

12.   Reminder: Repeated appearance of a sales letter has the effect of a reminder. It helps the customer to remember the product or the service of a firm whenever he is in need of it.

13.   It functions as a Salesman: A sales letter educates persuade and convinced the customer to buy a particular product or service wherever a salesman cannot visit the customers.

Collection Letters and It’s Nature

Credit is the soul of business, but the business can be kept working only by recovering the payment after selling the goods on credit. Otherwise, it is liable to perish. Collection letters are written to customers who have purchased on credit and not paid their bill on the due date. The purpose of collection letters twofold: one to get money back and other to retain customer’s goodwill.

Sometimes one single collection letter makes the debtor to pay the debt but sometime the lender has to persuade the debtor to make payment by writing a series of collection letters.

In the opinion of Kitty O. Locker, “Collection letters ask customers to pay for the goods and services they have already received.”

Quibble and others defined, “Collection letters are used by an organization to entice its charge customers to pay an outstanding charge-account balance.”

Features (Nature) of collection Letter: Collection or dunning letters possess some distinct features that differentiate them from other business letters. Some of the features of collection letter are as follows:

1.       Parties involved: Buyer who buys on credit and seller are involved in collection letter. Seller writes this letter to the buyer for payment of dues.

2.       Series of letter: Collection letters are written in a series. The series includes remainder letter, inquiry letter, appeal and urgency letter and warning letter.

3.       Objective: The prime objective of writing collection letter is to realize the dues from the customers.

4.       Governing principle: The governing principle of the letter is to collect the dues by retaining the customers with the company.

5.       Referring the previous letter: When dunning letters are written in a series, every subsequent letter mentions the reference of immediate earlier letter.

6.       Threat for legal action: The last letter of collection letter series warns the customer that the matter has been handed over to the lawyers for taking necessary legal action.

7.       Sent through registered post: The seller sends collection letter especially, the lat letter of the series though registered with acknowledgement to avoid unnecessary delay, or missing of the letter or denial from the part of the customer.

8.       Language: The letter is written by using friendly, persuasive but straightforward language.

Good News Letter and Bad News Letter

Letters can also be classified based on their content or message. Letters that contain good news or a good message or favourable information are good-news letters.

Letters that contain a bad news or a bad message or unfavourable information are bad-news letters. Not only personal letters but also an official letters can be classified on this basis. A letter sanctioning a loan to a customer or an over-draft facility to a concern, a letter of appointment or promotion or a letter acceding to the request of a client are good-news letters. Unfortunately, in business, one has to undertake the unenviable job of communicating bad news as well. It may be the rejection of a loan application, the denial of a due promotion or rejection of a client’s request.

Business organizations have also got to write letters that contain neither good nor bad news from the stand point of the receiver. It may be the announcement of a change of office hours or premises, or an announcement of a new product, such letters contain neutral messages and can be called “neutral – newsletters”.

A good news letter is easy to write because of its content. A bad news letter has to be written unoffending. Neutral letters usually are unsolicited letters. The receiver may treat it as junk mail. So care should be taken to write them well so that customers / recipient’s interest is aroused and he responds to them as desired by the sender.

These classifications of letters as official/and personal, formal or informal as good news letters, bad-news letters and neutral message letters are classifications based on general criteria and are broad classifications based on content. Business letters can be classified on the basis of the nature of business they transact or take care of. Of course, all business letters take care some area of the business.