Unit 4 Empire of Wealth

Objectives Objectives Focus Focus Warming up Warming up 7.1 Dealing with figures 7.1 Dealing with figures 7.2 Cash flow 7.2 Cash flow 7.3 Changing prices: Dealing with invoicing errors 7.3 Changing prices: Dealing with invoicing errors 7.4 Letters of Credit 7.4 Letters of Credit 7.5 Chasing payment 7.5 Chasing payment Sum-up Sum-up Assignment Assignment

Objectives Deal with figures Deal with figures Use letter of credit Use letter of credit Chase payment Chase payment

Focus Focus Invoicing and billing customers Invoicing and billing customers Reminding a customer of non- payment Reminding a customer of non- payment

Warming up There are many occasions when people have to deal with money and talk about money. We know that a company always has its own Accounts department to deal with monetary problems. They pay their suppliers and receive money from buyers by invoice, letter of credit or other forms. Sometimes they need to chase money, and sometimes they owe money to other companies. There are many occasions when people have to deal with money and talk about money. We know that a company always has its own Accounts department to deal with monetary problems. They pay their suppliers and receive money from buyers by invoice, letter of credit or other forms. Sometimes they need to chase money, and sometimes they owe money to other companies.

7.1 Dealing with figures A Read the numbers 1) ) ) 1 ¼ % KEY: 1 ） seventeen hundred and ninety-five 2 ） three point six six 3 ） one and a quarter per cent 3 ） one and a quarter per cent

7.1 B Read through the report beforehand and then listen to the recording. Play the recording three times. Read through the report beforehand and then listen to the recording. Play the recording three times. Answers Answers 7% 239 million 1.21 billion 4.5% 9.68 billion 2.35 billion 4.76 billion 890 million 2.05 billion 321 million

7.2 Cash flow This section covers the general issue of cash flow by means of an article. Suggested answers a 5, b 3, c 8, d 10, e 1, f 4, g 9, h 6, i 2, j 7

7.3 Changing prices: Dealing with invoicing errors In this section we have an integrated activity which involves billing and invoicing. It includes a number of complications. The first step involves completing the invoice according to the price list given and the information contained in the customer file. The second step, the role-play, then introduces numerous complications in the form of additional information and snags. In all there are four pieces of information which are listed below in step B for clarification purposes. In this section we have an integrated activity which involves billing and invoicing. It includes a number of complications. The first step involves completing the invoice according to the price list given and the information contained in the customer file. The second step, the role-play, then introduces numerous complications in the form of additional information and snags. In all there are four pieces of information which are listed below in step B for clarification purposes.

7.3 A Explain the vocabulary items which students may have problems. Remind the students that gross is a unit of quantity equivalent to 12 dozen in this context (i.e. 144). Then students look at the various documents before they begin to fill in the invoice.

Seller (name, address, VAT reg. no.) FINNTEC FINNTEC P.O.Box 325 P.O.Box 325 SF – TAMPERE SF – TAMPERE FINLAND FINLAND Invoice number Invoice date (tax point) 1 February 20___ 1 February 20___ Seller ’ s reference LS 43352/91 Buyer ’ s reference Other reference Consignee VAT no. NA Buyer (if not consignee) VAT no. Frigorifocp Ameglio S.A. Frigorifocp Ameglio S.A. Colonia 1023 Colonia 1023 Monte video Monte videoURUGUAY Country of origin f goods FINLAND FINLAND Country of destination URUGUAY Terms of delivery and payment FOB HELSINKI Payment against sight draft accompanied by documents through Rabobank Vessel/flight no. and date MS JUPITER Port/airport loading HELSINKI Port/airport of discharge MONTEVIDE O Place of delivery Place of delivery MONTEVIDEO MONTEVIDEO Shipping marks: container number No. and kind of packages: description of goods Commodity code Total gross wt (Kg) Total cube (m3) WLS 433 Total net wt (Kg) WLS 433 Total net wt (Kg) Item/packages 1 Gross/net/ Description Sensor switches Type A6D Quantity 35 gross Unit US $1.80 Less 10% discountAmount $ Invoice total $ $

7.3 B Read the letter in File 85 and draft an answer. FINNTEC P.O.Box 325 SF – TAMPERE FINLAND Frigorifco Ameglio S. A. Colonia 1023 MontevideoUruguay 20 February 20__ Ref: Customer No: 645 Dear Mr. Martinez, Account No. 645/A6D/03764 Invoice No We refer to your letter of 14 February 20--, concerning the payment of Invoice No As you state in your letter, the sum of $81, was incorrectly entered into the invoice. Since our accounts department has recently received new computing equipment we can only conclude that the error occurred before the program had been fully tested. The correct amount due for the 25 gross actually delivered is $5, This means the difference now due is $ We apologize for any inconvenience we may have caused you and look forward to doing further business with you in the future. Yours sincerely, G.Aaltio G. Aaltio Accounts Department

Reference to 7.3 B There has been a change of price since the quotation was given to Julio Martinez and the order was taken. The A6D was quoted at $1.60, but Frigorifico Ameglio S.A. should be charged at $1 ． 80. There has been a change of price since the quotation was given to Julio Martinez and the order was taken. The A6D was quoted at $1.60, but Frigorifico Ameglio S.A. should be charged at $1 ． 80. Payment of last month ’ s account has not yet been received by FINNTEC. Payment of last month ’ s account has not yet been received by FINNTEC. FINNTEC have only delivered 25 gross switches, instead of the 35 gross ordered. But they have billed 35 gross. FINNTEC have only delivered 25 gross switches, instead of the 35 gross ordered. But they have billed 35 gross. The Accounts Department of Frigorifico Ameglio S.A. have paid for the 25 gross at the old price, i.e. $1.60 each. The Accounts Department of Frigorifico Ameglio S.A. have paid for the 25 gross at the old price, i.e. $1.60 each.

Answer to 7.3 B Frigorifico Ameglio S.A. have received 25 gross (=144) A6D switches and have paid the old price of ＄ 1.60 Χ25 gross=$5, minus 10% discount, total $5, FINNTEC have, however, billed them for 35 gross A6D switches at the new price of $1.80, i.e. x 35 gross ＝ $9, minus 10 ％ discount, total $8, (The invoice they sent, according to Julio Martinez later on, had the decimal point in the wrong place: $81,648.00! ） Frigorifico Ameglio S.A. have received 25 gross (=144) A6D switches and have paid the old price of ＄ 1.60 Χ25 gross=$5, minus 10% discount, total $5, FINNTEC have, however, billed them for 35 gross A6D switches at the new price of $1.80, i.e. x 35 gross ＝ $9, minus 10 ％ discount, total $8, (The invoice they sent, according to Julio Martinez later on, had the decimal point in the wrong place: $81,648.00! ） The correct price for 25 gross at the new price of ＄ 1.80 x 25 gross ＝ $6,480 minus 10% discount, total $5, This means that the difference between the amount due ($5,832.00) and the amount paid ($5,184.00) is $ The correct price for 25 gross at the new price of ＄ 1.80 x 25 gross ＝ $6,480 minus 10% discount, total $5, This means that the difference between the amount due ($5,832.00) and the amount paid ($5,184.00) is $

7.4 Letters of Credit Q: What is Letters of Credit?

Letter of Credit the most commonly used method of payment for imports. the most commonly used method of payment for imports. With it, exporters can be sure that they will be paid when they dispatch the goods and importers have proof that the goods have been dispatched according to their instructions. With it, exporters can be sure that they will be paid when they dispatch the goods and importers have proof that the goods have been dispatched according to their instructions.

A partial glossary of some of the technical terms: revocable: a letter of credit, etc. which can be cancelled revocable: a letter of credit, etc. which can be cancelled bills of exchange = documents containing an instruction, usually to a bank, to pay a stated sum of money at a specified future date or on demand bills of exchange = documents containing an instruction, usually to a bank, to pay a stated sum of money at a specified future date or on demand drawn at sight = a bill of exchange, payable when the beneficiary presents it at the bank, is said to be `drawn at sight' drawn at sight = a bill of exchange, payable when the beneficiary presents it at the bank, is said to be `drawn at sight' of a particular tenor = according to stated terms or in a specified manner or at a specified time of a particular tenor = according to stated terms or in a specified manner or at a specified time port of discharge = the port at which the cargo is unloaded, etc. port of discharge = the port at which the cargo is unloaded, etc.

7.4 A Reading comprehension. Go through the items of terminology with the whole class before letting them loose on the pair work phase. It may help to introduce briefly the method of payment. Go through the items of terminology with the whole class before letting them loose on the pair work phase. It may help to introduce briefly the method of payment.

7.4 B Listening for detail. We will listen to a banker discusses problems that may arise when using letter of credit. Students read through the summary before hearing the recording. Then play the recording three times with sufficient time in between for students to think about what they are hearing. We will listen to a banker discusses problems that may arise when using letter of credit. Students read through the summary before hearing the recording. Then play the recording three times with sufficient time in between for students to think about what they are hearing.

Suggested answers to 7.4 B 1 expired 2 after 3 late 4 spelling 5 weights 6 money value 7 marks and numbers 8 smaller than 9 shipment 10 were missing 11 signatures had not been witnessed 11 signatures had not been witnessed 12 facsimile signatures

7.5 Chasing payment This section deals with the problems of cash flow from both sides of the fence: people who have to make apologies for non-payment and people who are insistent on receiving their rightful payments. It consists of an integrated activity. After step A the main skill practiced in this section is that of writing. This section deals with the problems of cash flow from both sides of the fence: people who have to make apologies for non-payment and people who are insistent on receiving their rightful payments. It consists of an integrated activity. After step A the main skill practiced in this section is that of writing.

7.5 A This is an exercise in listening for gist. Students should compare their answers in pairs. This is an exercise in listening for gist. Students should compare their answers in pairs. Answers True: 4,6 False: 1,2,3,5

7.5 B Complete the first reminder letter. Dear Hr Becker, Dear Hr Becker, According to our records, payment of our invoice, no , sent to you last March, has not yet been made.As specified on all our estimates and invoices our terms of business are 30 days net. Your invoice has now been outstanding for 90 days. According to our records, payment of our invoice, no , sent to you last March, has not yet been made.As specified on all our estimates and invoices our terms of business are 30 days net. Your invoice has now been outstanding for 90 days. In the case of unsettled debts of this duration it is our company policy to take legal action. We would naturally prefer not to have to go so far. In the case of unsettled debts of this duration it is our company policy to take legal action. We would naturally prefer not to have to go so far. Would you please send us a cheque by return? In case you have lost/mislaid the original I am enclosing a copy of our invoice. Would you please send us a cheque by return? In case you have lost/mislaid the original I am enclosing a copy of our invoice. We look forward to receiving your payment by return. We look forward to receiving your payment by return. Yours sincerely, Yours sincerely, Valentina SantinelliValentina Santinelli Valentina SantinelliValentina Santinelli (Credit Controller) (Credit Controller)

Answer to 7.5 B Dear Mr. Becker, Dear Mr. Becker, May we again remind you that this account is still overdue? May we again remind you that this account is still overdue? I would like to remind you also that our business terms are 30 days. We supply goods on the understanding of payment by the proper time. I would like to remind you also that our business terms are 30 days. We supply goods on the understanding of payment by the proper time. May we ask to settle your account. by return. May we ask to settle your account. by return. Yours sincerely, Yours sincerely, Valentina Santinell Valentina Santinell Valentina Saxttinelli Valentina Saxttinelli (Credit Controller) (Credit Controller)

Sum-up In this unit, we learnt: To use and practice monetary English in some of the most relevant settings. To use and practice monetary English in some of the most relevant settings.

Assignment Role-play the telephone conversation, exchanging information. Role-play the telephone conversation, exchanging information. Write to make enquiries by letter and fax. Write to make enquiries by letter and fax. Write to answer enquiries by letter and fax. Write to answer enquiries by letter and fax.