Business Letter Writing: Need, functions & Kinds

08/02/2020 0 By indiafreenotes

A business letter is a letter from one company to another, or between such organizations and their customers, clients, or other external parties. The overall style of letter depends on the relationship between the parties concerned. Business letters can have many types of content, for example to request direct information or action from another party, to order supplies from a supplier, to point out a mistake by the letter’s recipient, to reply directly to a request, to apologize for a wrong, or to convey goodwill. A business letter is sometimes useful because it produces a permanent written record, and may be taken more seriously by the recipient than other forms of communication.

Parts of Business Letter

A business letter will be more impressive if proper attention is given to each and every part of the business letter.

There are 12 Parts of Business Letter

  1. The Heading or Letterhead

It usually contains the name and the address of the business or an organization. It can also have an email address, contact number, fax number, trademark or logo of the business.

  1. Date

We write the date on the right-hand side corner of the letter below the heading.

  1. Reference

It shows the department of the organization sending the letter. The letter-number can also be used as a reference

  1. The Inside Address

It includes the name, address, postal code, and job title of the recipient. It must be mentioned after the reference. One must write inside address on the left-hand side of the sheet.

  1. Subject

It is a brief statement mentioning the reason for writing the letter. It should be clear, eye catchy, short, simple, and easily understandable.

  1. The Greeting

It contains the words to greet the recipient. It is also known as the salutation. The type of salutation depends upon the relationship with the recipient.

It generally includes words like Dear, Respected, or just Sir/Madam. A comma (,) usually follow the salutation.

  1. The Body Paragraphs

This is the main part of the letter. It contains the actual message of the sender. The main body of the mail must be clear and simple to understand. The body of the letter is basically divided into three main categories.

  • Opening Part: The first paragraph of the mail writing must state the introduction of the writer. It also contains the previous correspondence if any.
  • Main Part: This paragraph states the main idea or the reason for writing. It must be clear, concise, complete, and to the point.
  • Concluding Part: It is the conclusion of the business letter. It shows the suggestions or the need of the action. The closing of the letter shows the expectation of the sender from the recipient. Always end your mail by courteous words like thanking you, warm regards, look forward to hearing from your side etc.
  1. The Complimentary Close

It is a humble way of ending a letter. It is written in accordance with the salutation. The most generally used complimentary close are Yours faithfully, Yours sincerely, and Thanks & Regards.

  1. Signature and Writer’s Identification

It includes the signature, name, and designation of the sender. It can also include other details like contact number, address, etc. The signature is handwritten just above the name of the sender.

  1. Enclosures

Enclosures show the documents attached to the letter. The documents can be anything like cheque, draft, bills, receipts, invoices, etc. It is listed one by one.

  1. Copy Circulation

It is needed when the copies of the letter are sent to other persons. It is denoted as C.C.

  1. PostScript

The sender can mention it when he wants to add something other than the message in the body of the letter. It is written as P.S.

Need for a Business Letter

In business, letter writing is a major thrust area of communication. The modern goal of nations for a free global trade and the need to cut across national, linguistic and cultural barriers to promote trade have made the letter an important business tool.

A business letter serves certain important functions:-

  1. A business letter acts as a representative of the organization. It is an inexpensive substitute for a personal visit. 
  2. It seeks to provide information on subjects connected with business.
  3. A business letter provides valuable evidence for a transaction and thus serves a legal purpose.
  4. A business letter becomes a reference material to future transactions between organizations and individuals.
  5. A business letter promotes and sustains goodwill.
  6. A business letter motivates all the people involved in a business to a higher and better level of performance.
  7. A business letter enlarges and enhances the business. We can elaborate each of the functions thus.

Every organization has to continuously promote and expand its business. All information on its product and service gets updated through a business letter sent to customers and clients. It is a micro-level substitute even for advertisements. Agents and retailers in turn pass on the information to clientele spread over a large area. It promotes goodwill. New business contacts are forged and the already existing ones get reinforced. Goodwill promotes the image of an organization and gives scope for fair, ethical business values. Letters sent from an organization and received by it when classified and filed serve the purpose of reference. Precedents are available to guide future actions from files of outgoing and incoming letters. It has great archival value in helping to draw a graph of the growth or a slump in trade and business. Business letters have legal validity. In times of dispute and doubt they can provide substantial evidence to solve them. Many issues can be sorted out if mutual positions taken by transacting organizations are available through letters written by them.

Function of Business Letter Writing

  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.

  1. Conclude transaction

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

  1. 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.

  1. 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.

  1. Expansion of business

Through goodwill messages and through circular letters existing market can be expanded.

  1. 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.

  1. Evidence

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

  1. 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.

  1. 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.

  1. Problem solving

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

Kinds of Business Letter Writing

The term “business letters” refers to any written communication that begins with a salutation, ends with a signature and whose contents are professional in nature. Historically, business letters were sent via postal mail or courier, although the internet is rapidly changing the way businesses communicate. There are many standard types of business letters, and each of them has a specific focus.

  1. Sales Letters

Typical sales letters start off with a very strong statement to capture the interest of the reader. Since the purpose is to get the reader to do something, these letters include strong calls to action, detail the benefit to the reader of taking the action and include information to help the reader to act, such as including a telephone number or website link.

  1. Order Letters

Order letters are sent by consumers or businesses to a manufacturer, retailer or wholesaler to order goods or services. These letters must contain specific information such as model number, name of the product, the quantity desired and expected price. Payment is sometimes included with the letter.

  1. Complaint Letters

The words and tone you choose to use in a letter complaining to a business may be the deciding factor on whether your complaint is satisfied. Be direct but tactful and always use a professional tone if you want the company to listen to you.

  1. Adjustment Letters

An adjustment letter is normally sent in response to a claim or complaint. If the adjustment is in the customer’s favor, begin the letter with that news. If not, keep your tone factual and let the customer know that you understand the complaint.

  1. Inquiry Letters

Inquiry letters ask a question or elicit information from the recipient. When composing this type of letter, keep it clear and succinct and list exactly what information you need. Be sure to include your contact information so that it is easy for the reader to respond.

  1. Follow-Up Letters

Follow-up letters are usually sent after some type of initial communication. This could be a sales department thanking a customer for an order, a businessman reviewing the outcome of a meeting or a job seeker inquiring about the status of his application. In many cases, these letters are a combination thank-you note and sales letter.

  1. Letters of Recommendation

Prospective employers often ask job applicants for letters of recommendation before they hire them. This type of letter is usually from a previous employer or professor, and it describes the sender’s relationship with and opinion of the job seeker.

  1. Acknowledgment Letters

Acknowledgment letters act as simple receipts. Businesses send them to let others know that they have received a prior communication, but action may or may not have taken place.

  1. Cover Letters

Cover letters usually accompany a package, report or other merchandise. They are used to describe what is enclosed, why it is being sent and what the recipient should do with it, if there is any action that needs to be taken. These types of letters are generally very short and succinct.

  1. Letters of Resignation

When an employee plans to leave his job, a letter of resignation is usually sent to his immediate manager giving him notice and letting him know when the last day of employment will be. In many cases, the employee also will detail his reason for leaving the company.