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quote other specifications and facilities offered by them in order to influence the foreign
customers/importers. Since the reply to inquiry letter is a motivating document, it should
possess the realities and intimacy to the importers.

iii. Letter of Order
A letter of order is that which is written by an importer to the name of the exporter
by demanding the goods as specified. Purchase order in foreign trade is more complex
and requires longer formalities. When the quotation letter is found favourable to him, the
importer begins the import procedures. First of all, he should obtain import license, by
producing income tax certificate or VAT registration certification and auditor’s certificate
of the past years import trade dealings. After the import license is received, he should
collect the necessary amount of foreign currency and should open letter of credit (LC) in a
reputed bank. In this way, by producing all necessary documents and bank guarantee, he
sends the order letter to the exporter of the foreign country along with the letter of credit.
The order is placed in two ways, viz. direct placement of order and indirect placement of
order.

Direct Placement of Order
If the importer sends an order letter directly to the exporter/supplier by himself without
any agent/intermediator, the order is called a direct placement of order.

Indirect Placement of Order
If the importer sends an order letter to the exporter/supplier through the agent/
intermediator, the order is called indirect placement of order. Agent helps to conduct
foreign trade easily and smoothly.

iv. Letter of Acknowledgement
After receiving the letter of order, the supplier/exporter should inform to the importer
about the receipt of the order and its acceptance. He should also give the information
about the delivery of the goods in written form. As such, a letter of acknowledgement is
written by exporter to the importer by assuring the delivery of goods specified. The act of
acknowledgement of the order means conforming the order.

v. Preparation of Goods and Invoice
First of all, after the order is received, the exporter will make the goods ready for
dispatch by collecting them from his own store, or even purchasing immediately from
other suppliers. Then the goods will be finally packed with appropriate packaging system
as according to their nature. Then the invoice is prepared in necessary copies. An invoice
is a bill drawn by the exporter in the name of the importer stating the price and the other
necessary details of the goods. In this way, the exporter prepares the goods ready for
dispatch.

vi. Dispatch of the Goods and Bill of Lading
The act of dispatching the goods to the carrier company for their final delivery is
known as dispatch of goods. Goods should be dispatched through the most reliable and
the cheapest and the fastest mode and mean of transport. But if the importer has given
any special instruction about the delivery of the goods, that should be followed by the

48 Aakar’s Office Practice and Accountancy - 10 Trade 49