THE BUSINESS TRANSACTION

THE PEOPLE INVOLVED IN THE SALES TRANSACTION

BUYER SELLER TRANSPORT AGENTSBANK

STAGES OF A SALES TRANSACTION

• ENQUIRY

• REQUEST

FOR FURTHER

INFORMATION

• ORDER

• PAYMENT

• VOLUNTARY OFFER

• REPLY TO ENQUIRY

• CONFIRMATION AND EXECUTION OF ORDER

• DISPATCH OF THE GOODS

More details

VOLUNTARY OFFER: promote a product and contact new customersENQUIRY: ask information about products, prices, discounts, means of payment required, delivery, sales terms REPLY: give the information requestedORDER: order the goods + give details about the goods ( description and quantity), price and means of payment,instructions about transport, packing, insurance, documents, delivery timeCONFIRMATION OF ORDER: confirm the order and dispatch the goods according to instructionsPAYMENT: the buyer pays for the goods ordered

AGREEMENT

or

SALES TERMS QUALITY

DELIVERY

PAYMENT

QUALITY TERMS• ON EVIDENCE

(MERCE AVISTA)

• BY DESCRIPTION/BY TRADEMARK

(VENDITA SU DESCRIZIONE)

• BY SAMPLE

(VENDITA SU CAMPIONE)

• BY PATTERN (VENDITA SU CAMPIONE TIPO)

DELIVERY TERMS•READY DELIVERY: (CONSEGNA IMMEDIATA)

•PROMPT DELIVERY: ( PRONTA CONSEGNA)

•FORWARD DELIVERY/ DELIVERY BY…. ( CONSEGNA IN UN PERIODO SPECIFICATO)

PAYMENT TERMS• CASH WITH ORDER/PAYMENT IN ADVANCE (PAGAMENTO ALL’ORDINE/ANTICIPATO)

• CASH ON DELIVERY: (PAGAMENTO ALLA CONSEGNA)

• PAYMENT BY INSTALMENTS: (PAGAMENTO A RATE)

• DAA/DOCUMENTS AGAINST ACCEPTANCE

• DAP/DOCUMENTS AGAINST PAYMENT

Basic Stages of a Transaction SELLER BUYER

1. Voluntary offer 1. Enquiry

2 Reply to Enquiry

Offer - Quotation

2 Reply to Vol. Offer

1st Contact

2nd Contact

3 Order

4a Confirmation, Advice Note, Delivery Note

4b Invoice (or Pro-forma Invoice)

5 Payment

6 Delivery

Possible problems

SELLER BUYER

3 Order3b Inability to execute the order

5 Payment is DELAYED

6 DELAYED OR UNSATISFACTORY Delivery

5b REMINDERS: 1st Polite;2nd firm; 3rd threatening

5c REPLIES TO REMINDERS

(5d Legal Action)

6b COMPLAINTS

6c ADJUSTMENTS

Possible problems in the last stages

1

2

3

( Credit status enquiry )

ENQUIRY

Asks for information about goods required

• Details of goods

• Prices and discounts

• Delivery

Reply to an Enquiry

• It can be sent also in pre-printed form• The seller gives the buyer the information

requested• Very often a catalogue and a price list are

enclosed• Sometimes the seller quotes prices

specifically for this transaction (“quotation”)

Order

Official document that specifies:

• Goods that are requested

• Place and date of delivery

• Agreed price

Sometimes a pre-printed form can be used

Invoice

• Not necessarily a demand of payment

• It is a document that states:– Type and Quantity of goods supplied– Price per item– Total amount owed– Possible discounts

Pro-forma invoice

• In appearance it is the same as an invoice, but:

• It charges for the goods IN ADVANCE

• Delivery will take place only AFTER PAYMENT is received

• Useful when buyer has to ask the bank for a loan

Payment: Methods and instruments

• OPEN ACCOUNT (cheque, bank transfer)

• CLEAN COLLECTION (Bill of Exchange without any attached documents)

• DOCUMENTARY COLLECTION (B/E with Shipping Documents)

• CASH AGAINST DOCUMENTS or CAD

• DOCUMENTARY CREDIT

-WHO IS INVOLVED IN THE FOLLOWING STAGES? THE BUYER THE SELLER•VOLUNTARY OFFER•ENQUIRY•REQUEST FOR FURTHER INFORMATION•ORDER•PAYMENT•DISPATCH OF THE GOODS•REPLY TO ENQUIRY•CONFIRMATION AND EXECUTION OF ORDER

-THE STAGES ARE IN THE WRONG ORDER. PUT THEM IN THE CORRECT ORDER AS THEY NORMALLY OCCUR IN A BUSINESS TRANSACTION

Self Check

Credits

• This is an adaptation of a Presentation by Ms Elsa Bozzaotra