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THE BUSINESS TRANSACTION

THE BUSINESS TRANSACTION. THE PEOPLE INVOLVED IN THE SALES TRANSACTION. BUYER. SELLER. TRANSPORT AGENTS. BANK. • ENQUIRY • REQUEST FOR FURTHER INFORMATION • ORDER • PAYMENT. VOLUNTARY OFFER REPLY TO ENQUIRY

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THE BUSINESS TRANSACTION

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  1. THE BUSINESS TRANSACTION

  2. THE PEOPLE INVOLVED IN THE SALES TRANSACTION BUYER SELLER TRANSPORT AGENTS BANK

  3. • ENQUIRY • REQUEST FOR FURTHER INFORMATION • ORDER • PAYMENT VOLUNTARY OFFER REPLY TO ENQUIRY CONFIRMATION AND EXECUTION OF ORDER DISPATCH OF THE GOODS STAGES OF A SALES TRANSACTION More details

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

  5. AGREEMENT or SALES TERMS QUALITY DELIVERY PAYMENT

  6. QUALITY TERMS • ON EVIDENCE • (MERCE AVISTA) • BY DESCRIPTION/BY TRADEMARK • (VENDITA SU DESCRIZIONE) • BY SAMPLE • (VENDITA SU CAMPIONE) • BY PATTERN(VENDITA SU CAMPIONE TIPO)

  7. DELIVERY TERMS • READY DELIVERY:(CONSEGNA IMMEDIATA) • PROMPT DELIVERY:( PRONTA CONSEGNA) • FORWARD DELIVERY/ DELIVERY BY….( CONSEGNA IN UN PERIODO SPECIFICATO)

  8. 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

  9. Basic Stages of a Transaction SELLER BUYER 1st Contact 1. Voluntary offer 1. Enquiry 2nd Contact 2 Reply to Enquiry Offer - Quotation 2 Reply to Vol. Offer 3 Order 4a Confirmation, Advice Note, Delivery Note 4b Invoice (or Pro-forma Invoice) 5 Payment 6 Delivery Possible problems

  10. Possible problems in the last stages SELLER BUYER 3b Inability to execute the order 3 Order 1 ( Credit status enquiry ) 5 Payment is DELAYED 2 5b REMINDERS: 1st Polite;2nd firm; 3rd threatening 5c REPLIES TO REMINDERS (5d Legal Action) 6 DELAYED OR UNSATISFACTORYDelivery 3 6b COMPLAINTS 6c ADJUSTMENTS

  11. ENQUIRY Asks for information about goods required • Details of goods • Prices and discounts • Delivery

  12. 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”)

  13. Order Official document that specifies: • Goods that are requested • Place and date of delivery • Agreed price Sometimes a pre-printed form can be used

  14. 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

  15. 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 AFTERPAYMENT is received • Useful when buyer has to ask the bank for a loan

  16. 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

  17. Self Check -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

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

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