Types of Business Letters: Inquiry, Order, Complaint, Credit, Reply Letters & Circulars

Overview: How Business Letters Follow the Trade Cycle

Every business transaction goes through a natural sequence of letters. Look at how the 6 types of letters in your syllabus connect in a real trade deal:

(And whenever a business wants to send the same general announcement to 500 customers or dealers at once, it sends a Circular Letter!)

1. Inquiry Letters & Reply (Quotation) Letters

A. Letter of Inquiry

• Meaning: Written by a prospective buyer to a seller/manufacturer asking for information about product availability, price list, catalogue, free samples, trade discount, credit terms, and delivery time.
• Types:
  1. Solicited Inquiry: Written in response to a seller’s advertisement.
  2. Unsolicited (Routine) Inquiry: Written on the buyer’s own initiative.

📝 Ready Exam Specimen — Letter of Inquiry:

                        SHARMA BOOK DEPOT
               Khajuri Bazaar, Indore - 452002 (M.P.)

Ref: SBD/INQ/2026/12                                    26th October, 2026

The Sales Manager,
Kalyani Publishers Pvt. Ltd.,
Daryaganj, New Delhi - 110002

Subject: Trade Inquiry for BBA 1st Semester Textbooks (2026-27 Session)

Dear Sir,
With the new academic session starting next month at Devi Ahilya Vishwavidyalaya
(DAVV), Indore, there is a high demand for BBA 1st Semester textbooks on Business
Communication, Principles of Management, and Financial Accounting.

Kindly send us your latest illustrated catalogue and wholesale price list. Please
also let us know your maximum bulk trade discount on orders above 300 copies, mode
of transport dispatch, and whether you allow 45 days' trade credit.

Awaiting your prompt quotation.

Yours faithfully,
For Sharma Book Depot
Anil Sharma (Proprietor)

B. Reply to Inquiry (Quotation Letter)

• Meaning: Sent by the seller in response to the buyer’s inquiry, thanking them, enclosing the catalogue, and quoting specific prices, GST, discounts, transport terms (F.O.R. / Ex-Warehouse), and payment terms.

2. Order Letters (Purchase Orders)

• Meaning: Once the buyer is happy with the seller’s quotation, the buyer writes an Order Letter placing a formal legal order to supply the specified goods.
• Must Include 5 Exact Details:
  1. Exact Item Name, Brand, Catalogue Code, and Quantity (best presented in a neat Table!).
  2. Agreed Unit Price and Discount.
  3. Delivery Date and Exact Destination Address.
  4. Mode of Transport (Road transport/Rail/Courier) and Packing instructions.
  5. Mode of Payment (Advance NEFT/Cheque enclosed, Cash on Delivery, or 30-day Credit).

📝 Ready Exam Specimen — Order Letter:

                        SHARMA BOOK DEPOT
               Khajuri Bazaar, Indore - 452002 (M.P.)

Ref: SBD/ORD/2026/19                                    29th October, 2026

The Sales Manager,
Kalyani Publishers Pvt. Ltd.,
Daryaganj, New Delhi - 110002

Subject: Purchase Order for BBA 1st Semester Textbooks

Dear Sir,
Thank you for your Quotation No. KP/402 dated 27th October, 2026. We are pleased
to place a firm order for the following books at the agreed 25% trade discount:

-------------------------------------------------------------------------
S.No.   Title of Book                           Edition     Qty (Copies)
-------------------------------------------------------------------------
1.      Business Communication (BBA Sem-I)      2026 Ed.    150 Copies
2.      Principles of Management (BBA Sem-I)    2026 Ed.    100 Copies
3.      Financial Accounting (BBA Sem-I)        2026 Ed.    100 Copies
-------------------------------------------------------------------------

Please ensure the books are packed in waterproof cartons and dispatched via Patel
Roadways to reach us on or before 10th November, 2026. As agreed, 50% advance has
been transferred via NEFT (UTR No. SBIN26102988), and the balance will be paid
within 30 days of delivery.

Yours faithfully,
For Sharma Book Depot
Anil Sharma (Proprietor)

3. Complaint (Claim) Letters & Adjustment (Reply) Letters

A. Complaint (Claim) Letter

• Meaning: Written by the buyer to the seller when something goes wrong with the order — such as damaged/broken goods, wrong items sent, short quantity, poor quality, overcharging in the bill, or delayed delivery.
• Golden Rule of Writing a Complaint Letter: Be Firm, Not Rude! Never use abusive or angry words. State the order number, describe the exact defect calmly, and clearly state what remedy you want (free replacement, repair, or refund).

📝 Ready Exam Specimen — Complaint Letter:

                        SHARMA BOOK DEPOT
               Khajuri Bazaar, Indore - 452002 (M.P.)

Ref: SBD/CMP/2026/24                                    12th November, 2026

The Sales Manager,
Kalyani Publishers Pvt. Ltd.,
Daryaganj, New Delhi - 110002

Subject: Complaint regarding damaged and misprinted copies in Invoice No. KP-889

Dear Sir,
We received the consignment of 350 books yesterday against our Order No.
SBD/ORD/2026/19 dated 29th October, 2026.

Upon opening Carton No. 2, we regret to inform you that 25 copies of "Business
Communication" have severely torn bindings and missing pages (Pages 49 to 80),
making them unsaleable to students.

Since colleges have already reopened, we request you to urgently dispatch 25
fresh replacement copies by express courier at your cost. We are returning the
25 defective copies via transport freight-to-pay.

Yours faithfully,
For Sharma Book Depot
Anil Sharma (Proprietor)

B. Reply to Complaint (Adjustment Letter)

• Meaning: The seller’s polite response to a complaint letter.
• How to Structure a Reply/Adjustment Letter:
  1. Express sincere regret for the inconvenience caused (never argue or blame the customer).
  2. Explain briefly how the mistake happened (e.g., transit handling or binding batch error).
  3. State the immediate corrective action taken (e.g., “We have already dispatched 25 fresh replacement copies today via BlueDart Express”).
  4. Assure better care in future orders to retain customer goodwill.

4. Credit Letters & Status Inquiries

• Meaning: In wholesale trade, buyers often purchase goods on 30-to-60-day credit rather than paying 100% cash upfront.
• Types of Credit Correspondence:
  1. Request for Credit: A new buyer writes to the manufacturer requesting credit facilities and provides 2 Bank/Trade References (names of reputable traders or their bank who can vouch for their financial honesty).
  2. Status / Credit Inquiry Letter: The seller confidentially writes to the buyer’s bank or trade references asking about the buyer’s financial standing, honesty, and payment habits.
  3. Granting or Refusing Credit Letter: If references are good, credit is approved politely; if weak, credit is declined tactfully while offering cash-discount terms.

5. Circular Letters

• Meaning: When a business needs to communicate the exact same piece of non-confidential information to a large number of customers, dealers, shareholders, or employees simultaneously, it writes a Circular Letter.
• When Are Circulars Used?
  • Opening a new branch or shifting to a new office address.
  • Launching a new product line or revising wholesale prices.
  • Admitting a new partner or announcing the retirement of a partner.
  • Announcing festive clearance sales or changes in office timings.

📝 Ready Exam Specimen — Circular Letter (Shifting of Showroom):

                        MEHTA GARMENTS & TEXTILES
               52, Rajwada Chowk, Indore - 452002 (M.P.)

Circular No.: MGT/CIR/2026/05                           1st November, 2026

Dear Valued Customer / Dealer,

Subject: Shifting of Our Wholesale Showroom to Larger Premises at Sapna Sangeeta Road

We thank you for your continued patronage over the last 15 years. To serve you
better with a wider range of festive and wedding collections, along with ample car
parking, we are delighted to inform you that our showroom is shifting to a new
3-storey building from 15th November, 2026:

        New Address:  Plot No. 18, Main Sapna Sangeeta Road, Indore - 452001
        Phone Nos.:   0731-409XXXX (Unchanged)

We cordially invite you to visit our new showroom on the inauguration day (15th Nov)
and avail a special 10% inaugural discount on all purchases during the first week.

Looking forward to welcoming you at our new premises!

Yours cordially,
For Mehta Garments & Textiles
Rajesh Mehta (Managing Partner)

💡 DAVV Exam Tip

Question (10 Marks): “Draft an Inquiry Letter / Order Letter / Complaint Letter / Circular Letter…”

• In DAVV BBA exams, at least one practical letter-drafting question is asked every year!
• Always draw a neat outer border box around your letter, invent a realistic Indore/Delhi company letterhead, include a Ref. No., Date, Subject Line, and keep the body in 3 crisp paragraphs.