The Collection of Overdue Accounts

There has probably never been a trading firm whose accounts department has not had to spend a considerable amount of time in trying to get customers to pay overdue accounts. In foreign trade it is fortunately less frequent than in home trade, as sellers usually insist on terms of payment which secure payment, when dealing with customers they do not know. The only risk comes from customers with open accounts, and as these are normally buyers with proven reputation, this risk is small. However, it can and sometimes does happen that an account is not paid when due. A buyer may face a period of bad trade and find himself temporarily short of money. He may also have a complaint about the goods sent; he may refuse to accept a bill of exchange. A good customer will inform his supplier of any situation and try to get some concession from him. If he does not, and an account becomes overdue, the seller has to ask for payment.

As in the home trade, it is usual to make the first request for payment brief and polite. The matter may be an oversight, and the simple of sending a copy of the account with a remark such as ‘Overdue – please settle ’ or ‘Kindly remit ’ may be all that is necessary. If a company decides to send a letter requesting payment, the style and tone of the letter depends on the kind of customer for whom it is intended, how long overdue, how valuable the business is, etc.

A first request will normally be friendly in tone, be accompanied by a copy of the account, and show neither annoyance nor any hint of doubt about the customer’s intention to pay.

If the seller does not receive a reply within a reasonable period, he will normally send a second and sometimes even a third letter before taking action through legal channels to obtain the money due to him. And finally to show that the writer cannot and will not wait any longer for his money and that he now intends to take action to enforce payment the seller writes the final demand. He may turn for assistance to a bank, debt-collector agency, a trade association, or a solicitor.

 

Answer the following questions:

1. Does it take a lot of time for the sellers to make the Buyers pay overdue accounts?

2.  What are the reasons for the Buyers not to pay when due?

3. What is the tone of the first request for payment? Why?

4. When should the final demand for payment be written?

 

Vocabulary

 

accounts department бухгалтерия, бухгалтерский отдел

overdue account просроченный платеж (счет)

foreign trade внешняя торговля

home trade внешняя торговля

terms of payment условия оплаты

to secure payment гарантировать оплату (зд.)

open account открытый счет

proven reputation проверенная репутация

short of money нехватка финансовых средств

complaint about sth претензия, рекламация по к-л поводу

bill of exchange (B/E) переводной вексель

to get  concession from sb получить уступку от к-л

overdue просроченный (о векселе, долге и т.п.)

the first request for payment первое напоминание о долге

oversight недосмотр

settle рассчитываться, расплачиваться

remit переводить, пересылать (деньги)

take action through legal channels принимать юридические действия

final demand окончательное требование погашения задолженности

Exercise 1. Read and translate the sentences paying attention to the words and phrases in italics.

1. We have to draw your attention to our statement of 19 February for the amount of £549 and to remind you that settlemen t was due by 29 February.

2. We sent you our quarterly statement on 24 March, but since we have not received any advice of payment.

3. We enclose a copy of statement and would be glad if you would kindly arrange early settlement.

4. Will you please let us have your draft in settlement of our invoice no. 74863 of 23 November.

5. We are sorry to have to inform you that we have not yet received a credit advice from our bank in connection with the consignment sent to you on 12 April.

6. As we have received no replies to our letters of 22 October and 30 October we have no option but to take immediate legal action to recover the amount due to us.

7. It is impossible to keep this account open any longer and we are taking measures to obtain payment through legal channels.

8. We have given you every opportunity of discharging your debt but have had no evidence of your willingness to honor your obligations.

9. We are sorry to have to inform you that as we cannot get any satisfactory reply from you regarding settlement of our account we shall have to refer the matter to our solicitors, unless we receive some news from you within 3 days.

10.  As all our attempts to induce you to clear your indebtedness to us have been ignored, we have instructed our solicitors to take the necessary action to enforce payment.

11.   Under our agreement payment for your order no.4768 sent to you is due 2 weeks from date of invoice.

 

Exercise 2. Read and translate the following letters from English into Russian.

 

(1) Dear Sirs,

As we have always received your payments punctually we are surprised to have had neither transfer nor your report in connection with our current statement of 12 April. We think you may not have received our letter with the statement as settlement is now 3 weeks overdue. We are enclosing a copy of the account to the amount of £ 579.45 and you will no doubt give your early attention.

We are looking forward to your early reply.

Yours faithfully

____________

 

(2) Dear Sirs,

As we have not received a reply to our letter of 30 April requesting settlement of the account no. 6549, we are writing again to remind you that the amount still owing is ₤ 579.45.

No doubt there is some special reason for the delay in payment, and we should welcome an explanation together with your remittance.

Yours faithfully

_____________

 

(3) Dear Sirs,

We do not appear to have received replies to our previous requests of 30 April and 12 May for payment of the sum of ₤579.45 still owing on this account.

 

It is with the utmost regret that we have reached the stage when we must press for immediate payment. We have no wish to be unreasonable, but failing payment by 1 June you will leave us no option but to place the matter in other hands.

 

We sincerely hope this will not become necessary.

Yours faithfully

_____________

 

(4) Dear Sirs,

All our attempts to induce you to clear your indebtedness to us have been ignored, and we are quite unable to understand why you have not even replied to our letters.

We think we have shown reasonable patience and consideration, but we can do so no longer and must reluctantly take steps to obtain payment at law.

As you must yourselves appreciate, your own credit and reputation are certain to suffer by our action, but we regret that there is no alternative. If, however, you make an immediate payment to XYZ Bank of the full amount due, we will suspend actions against you.

 

Yours faithfully

_____________

 

Exercise 3. Fill in the gaps with prepositionsand translate the sentences.

 

1. We are sorry to have to inform you that we have not yet received a credit advice … our bank … connection … the consignment sent to you …3 March.

2. … our agreement payment … your order no.764 sent to you is due 4 weeks … date of invoice.

3. We are sorry to have to inform you that we shall have to refer the matter … our solicitors, unless we receive some news from you … 2 days.

4. It is impossible to keep this account open any longer and we are taking measures to obtain payment … legal channels.

5. No doubt there is some special reason … the delay … payment, and we should welcome an explanation … … your remittance.

6. Will you please let us have your draft … settlement … our invoice no. 6483 of 22 October.

7.   We have no wish to be unreasonable, but failing payment …31 December you will leave us no option but to take immediate legal actions to recover the amount due …us.

8. We have to draw your attention … our statement … 21 January …   the amount … £157 and to remind you that settlement was due … 31 January.

9. Unless you pay the overdue statement … end of the month we will place the matter … hands of our solicitors.

10.  We regret to say that we must hold your order no.427 until we have your payment or an explanation … your delay … replying …our letters.

 

Exercise 4. Translate the following sentences from Russian into English.

1. Вы прекрасно осведомлены, что, если вы немедленно не исправите ситуацию, то Ваша репутация может пострадать.

2. По крайней мере, Вы могли бы объяснить, почему Ваша задолженность до сих пор не погашена.

3. Мы были бы Вам признательны, если бы Вы подождали, пока спор не будет урегулирован.

4. Сообщаем Вам, что платеж по выписке из счета за март до сих пор не произведен.

5. К сожалению, большая часть нашего нового персонала не привыкла к нашей системе выставления счетов клиентам.

6. Тем временем, просим обратить внимание на наши новые цены, указанные на первой странице нашего последнего прейскуранта.

7. Вы всегда оплачивали свои счета в срок, и это первый раз, когда Ваш счет оказался просроченным на 3 недели.

8. Если Вы не погасите задолженность в течение недели, то мы будем вынуждены передать дело нашим юристам, чтобы взыскать причитающуюся нам сумму.

9. Мы неоднократно напоминали Вам, что Ваш счет за июнь до сих пор не оплачен.

10.  Мы убедительно просим Вас, выяснить причину задержки оплаты Ваших счетов.

11.  Мы даем Вам срок до конца месяца, чтобы ликвидировать Вашу задолженность.

12.  Если Вы не произведете оплату просроченных счетов за декабрь до конца месяца, то мы будем вынуждены обратиться в суд.

Exercise 5. Translate the following letters from Russian into English.

  (1) Уважаемые господа!

  В нашем письме от 14 февраля относительно счета № 2754 на сумму $   14,370 мы обращали ваше внимание на тот факт, что он остается неоплаченным более двух месяцев. Когда мы дали согласие предоставить Вам кредит, мы указывали на необходимость оплаты счетов точно в срок.

Насколько Вы понимаете, задержка в оплате может создать дополнительные трудности и проблемы для нас, поскольку у нас есть обязательства перед нашими поставщиками. Поэтому мы были бы признательны Вам, если бы Вы сообщили нам о причинах задержки в оплате или сделали перевод причитающейся нам суммы в кратчайшие сроки.

С уважением

   _____________ 

(2)Уважаемые господа!

    Мы вынуждены подчеркнуть, что если мы хотим сохранить хорошие

деловые отношения, то вы обязаны незамедлительно оплатить все наши счета.

До сих пор мы не получили никакой информации из банка об их оплате, что создает нам значительные проблемы и трудности, поскольку у нас есть обязательства перед нашими поставщиками и покупателями.

Мы вынуждены сообщить Вам, что если до 28 октября с.г. вышеупомянутые счета не будут оплачены, мы будем вынуждены обратиться в Арбитражный суд Московской торгово-промышленной палаты, чтобы взыскать причитающиеся нам суммы.

Мы надеемся получить от Вас ответ в кратчайшие сроки.

С уважением

 

 

Unit 7

BANKING

Text 1

Banks are among the most important financial institutions. The way in which a bank is organized and operates is determined by its objectives. The most important bank in a country is a central bank (in Great Britain it is called The Bank of England) which issues and manages currency, influences the base lending rate and helps to carry out the government’s financial policy. Banks in the UK can be divided into two groups: commercial banks and merchant banks.

Merchant banks specialize in areas of international trade and finance, discounting bills, confirming credit status of overseas customers through confirming houses, acting in the new issue market and in the bullion and Eurobond market. They are also involved in shipping, insurance and foreign exchange markets.

Commercial banks offer similar services but are especially interested in private customer’s accounts, encouraging them to use their current account, deposit account, saving account and credit facilities. They lend money against securities, in the form of overdrafts and loans, pay accounts regularly by standing orders, and transfer credits through the bank Giro system. The ‘ big four ’ commercial banks in the UK are Barclays, Lloyds, Midland and Westminster.

Customers can keep different types of accounts with the bank. Current account is an account into which a client pays his trading receipts and on which he draws his checks. As a rule no interest is paid on this type of account and banks made charges for handling these accounts unless an agreed minimum balance is kept in over or agreed period of time. A lot of companies have more than one current account, for example No.1 current account for paying wages and overheads and No.2 account for paying suppliers.

  Deposit accounts pay interest to a maximum established by the bank, but the customer can be asked to give notice of withdrawal. Banks offer various types of other accounts. There are numerous savings accounts on which interest is paid according to the credit balance in the account and the period it is left for. With these accounts there are penalties for withdrawing money before the agreed date.

Customers making regular payments, such as rent or mortgage payments, can ask the bank to transfer the money to the payee on a particular day every month. A standing order or direct debit is one of the methods of doing this.

Customers can apply to the bank for loans or overdrafts. A loan is usually covered by a negotiable security, for example, shares, with repayment specified on the agreement. With an overdraft the customer is given the permission to overdraw an account up to a certain limit.

Banks play a vital role in international trade, because all payments are effected through the bank. By means of these services banks not only see to it that justice is done by both buyer and seller, but that the time lag between order and delivery is overcome without loss for both parties. These services are to be paid for, but they are not expensive and are almost indispensable – the bank comes into every transaction at some stage or another.

 

 

Answer the following questions:

1. What are the main functions of a central bank?

2. What do merchant banks specialize in?

3. What services are provided by commercial banks?

4. What types of accounts can you keep with the bank?

5. What is one of the methods of making regular payments, such as rent or mortgage?

6. Why do the banks play a vital role in international trade?

 

Vocabulary

 

central bank центральный банк

The Bank of England Английский банк, Банк Англии

to issue and manage currency выпускать и контролировать национальную валюту

lending rate кредитная ставка

commercial bank коммерческий банк

merchant bank торговый банк

discounting bills учтенный переводной вексель

credit status кредитоспособность

confirming house комиссионная фирма

the bullion and Eurobond market рынок Еврооблигаций и благородных металлов

current account текущий счет

deposit account депозитный счет

savings account сберегательный счет

credit facilities кредиты

security залог, обеспечение

overdraft овердрафт

loan ссуда, займ, кредит

standing order постоянное письменное поручение клиента банку, автоплатеж

Giro system система жирорасчетов

big four большая четверка (четыре крупнейших банка в Великобритании)

to keep an account with the bank иметь счет в банке

agreed minimum balance согласованный минимальный остаток на счете

overheads накладные расходы

a notice of withdrawal предварительное уведомление об изъятии вклада

to withdraw money снимать деньги со счета

mortgage payments выплаты по ипотеке

to transfer переводить (деньги)

direct debit прямое дебетование, прямой дебет

negotiable security ликвидный залог ( в качестве обеспечения кредита)

to overdraw превысить кредит(в банке), допустить овердрафт

time lag запаздывание, время задержки (зд.)

Exercise 1. Read and translate the sentences paying attention to the words and phrases in italics.

Opening an account

1. Please open a current account for us in the name of Jack Harrison & Co. We enclose specimen signatures of our partners, either of whom may sign cheques on our behalf.

2. Will you kindly open our no. 1 account with $550 and place $ 350 to our credit in a no. 2 account.

3. To open the account we enclose a cheque on XYZ Bank for $ 2,500.

4. Will you kindly open the account in my name. I am instructing my Bank to transfer the equivalent of $ 5,000 for this purpose.

5. Please advise us of the present interest rate on deposit accounts and what balance you require us to keep on our current account to eliminate charges.

6. We would appreciate if you could open a current account for us under our trading name R&D Fashions Ltd. Enclosed you will find specimen signatures which will be requested on all cheques.

 

Payment instructions

1. Please transfer $ 200 to Midland Bank Ltd. to the credit of Smith & Sons Ltd. debiting our no. 2 account.

2. Please pay to the XYZ Bank on the 1^st of each month and till further notice, the sum of $ 1,000 for the account of Jack McMillan.

3. Please transfer the sterling equivalent of $ 450 to XYZ Banking Corporation. This sum represents payment for costs incurred by the firm mentioned above on our behalf.

4. With the effect from 1 July will you please discontinue payments to the Midland bank authorized in our letter of 15 January.

5. Kindly cancel the credit opened in favour of Ms. Brown as alternative arrangements have been made.

6. Please withhold payment of $ 560 to Black, Reed & Co. as the purchase of the goods concerned may not now be made. We will keep you informed of any development.

7. We have to ask you to stop payment of our cheque no. 3267 drawn on 12 of September in favour of Smith & Co. until further notice.

8. Please suspend payment of our cheque no. 5823 in favour of Messrs. Brown & White, as it appears to have been lost.

9. Would you please arrange for $ 547.000 to be transferred from our No.2 account to our landlords with Dewlands Bank on the 1^st of every month.

10.  Please would you transfer ₤ 1,500 from our current account No.1 to our deposit account No. 3.