Unit 7
Money
matters
Objectives
Focus
Warming up
7.1 Dealing with figures
7.2 Cash flow
7.3 Changing prices: Dealing with
invoicing errors
7.4 Letters of Credit
7.5 Chasing payment
Sum-up
Assignment
Objectives
Deal with figures
Use letter of credit
Chase payment
Focus
Invoicing and billing customers
Reminding a customer of nonpayment
Warming up
 There are many occasions when people have
to deal with money and talk about money. We
know that a company always has its own
Accounts department to deal with monetary
problems. They pay their suppliers and receive
money from buyers by invoice, letter of credit
or other forms. Sometimes they need to chase
money, and sometimes they owe money to
other companies.
7.1 Dealing with figures
A Read the numbers
1) 1795
2) 3.66
3) 1¼%
KEY:
1）seventeen hundred and ninety-five
2）three point six six
 3）one and a quarter per cent
7.1 B
 Read through the report beforehand and
then listen to the recording. Play the
recording three times.
 Answers
7% 239 million 1.21 billion 4.5% 9.68
billion 2.35 billion
4.76 billion 890 million 2.05 billion 321
million
7.2 Cash flow
This section covers the general issue of
cash flow by means of an article.
Suggested answers
a 5, b 3 , c 8 , d 10, e 1,
f4, g9, h6 , i 2, j 7
7.3 Changing prices: Dealing with
invoicing errors
 In this section we have an integrated activity
which involves billing and invoicing. It includes a
number of complications. The first step involves
completing the invoice according to the price list
given and the information contained in the
customer file. The second step, the role-play,
then introduces numerous complications in the
form of additional information and snags. In all
there are four pieces of information which are
listed below in step B for clarification purposes.
7.3
A
Explain the vocabulary items which students
may have problems. Remind the students
that gross is a unit of quantity equivalent to
12 dozen in this context (i.e. 144). Then
students look at the various documents
before they begin to fill in the invoice.
Seller (name, address, VAT reg. no.)
FINNTEC
P.O.Box 325
SF – 33200 TAMPERE
FINLAND
Consignee
Invoice number
04276
VAT no.
Invoice date (tax point)
1 February 20___
Seller’s reference
LS 43352/91
Buyer’s reference
645
Other reference
Buyer (if not consignee)
VAT no.
Frigorifocp Ameglio S.A.
Colonia 1023
Monte video
URUGUAY
NA
Country of origin f goods
FINLAND
Vessel/flight no. and date
MS JUPITER
Port/airport of discharge
MONTEVIDE
O
Country of
destination
URUGUAY
Terms of delivery and payment
FOB HELSINKI
Payment against sight draft
accompanied by documents
through Rabobank
Port/airport loading
HELSINKI
Place of delivery
MONTEVIDEO
Shipping marks: container number No. and kind of packages: description of goods Commodity code Total gross wt (Kg) Total cube (m3)
WLS 433
Item/packages
1
Total net wt (Kg)
Gross/net/ Description
Sensor switches Type A6D
Quantity
35 gross
Unit
US $1.80
Less 10%
discount
Amount
$ 9072.00
-907.20
Invoice total
$ 8164.80
7.3 B Read the letter in File 85 and draft
an answer.
FINNTEC
P.O.Box 325
SF – 33200 TAMPERE
FINLAND
Frigorifco Ameglio S. A.
Colonia 1023
Montevideo
Uruguay
20 February 20__
Ref: Customer No: 645
Dear Mr. Martinez,
Account No. 645/A6D/03764 Invoice No. 04276
We refer to your letter of 14 February 20--, concerning the payment of Invoice No. 04276.
As you state in your letter, the sum of $81,648.00 was incorrectly entered into the invoice.
Since our accounts department has recently received new computing equipment we can only conclude that the error
occurred before the program had been fully tested.
The correct amount due for the 25 gross actually delivered is $5, 832.00. This means the difference now due is
$648.00.
We apologize for any inconvenience we may have caused you and look forward to doing further business with you in
the future.
Yours sincerely,
G.Aaltio
G. Aaltio
Accounts Department
Reference to 7.3 B
 There has been a change of price since the quotation
was given to Julio Martinez and the order was taken.
The A6D was quoted at $1.60, but Frigorifico Ameglio
S.A. should be charged at $1．80.
 Payment of last month’s account has not yet been
received by FINNTEC.
 FINNTEC have only delivered 25 gross switches, instead
of the 35 gross ordered. But they have billed 35 gross.
 The Accounts Department of Frigorifico Ameglio S.A.
have paid for the 25 gross at the old price, i.e. $1.60
each.
Answer to 7.3 B
 Frigorifico Ameglio S.A. have received 25 gross (=144)
A6D switches and have paid the old price of＄1.60 Χ25
gross=$5,760.00 minus 10% discount, total $5,184.00.
FINNTEC have, however, billed them for 35 gross A6D
switches at the new price of $1.80, i.e. x 35 gross＝
$9,072.00 minus 10％discount, total $8,164.80. (The
invoice they sent, according to Julio Martinez later on, had
the decimal point in the wrong place: $81,648.00!）
 The correct price for 25 gross at the new price of＄1.80 x
25 gross＝$6,480 minus 10% discount, total $5,832.00.
This means that the difference between the amount due
($5,832.00) and the amount paid ($5,184.00) is $648.00.
7.4 Letters of Credit
Q:
What is Letters of Credit?
Letter of Credit
the most commonly used method of
payment for imports.
With it, exporters can be sure that they will
be paid when they dispatch the goods and
importers have proof that the goods have
been dispatched according to their
instructions.
A partial glossary of some of the technical
terms:
 revocable: a letter of credit, etc. which can be cancelled
 bills of exchange = documents containing an instruction,
usually to a bank, to pay a stated sum of money at a
specified future date or on demand
 drawn at sight = a bill of exchange, payable when the
beneficiary presents it at the bank, is said to be `drawn
at sight'
 of a particular tenor = according to stated terms or in a
specified manner or at a specified time
 port of discharge = the port at which the cargo is
unloaded, etc.
7.4 A Reading comprehension.
Go through the items of terminology with
the whole class before letting them loose
on the pair work phase. It may help to
introduce briefly the method of payment.
7.4 B Listening for detail.
We will listen to a banker discusses
problems that may arise when using letter
of credit. Students read through the
summary before hearing the recording.
Then play the recording three times with
sufficient time in between for students to
think about what they are hearing.
Suggested answers to 7.4 B
1 expired
2 after
3 late
4 spelling
5 weights
6 money value 7 marks and numbers
8 smaller than
9 shipment
10 were missing
11 signatures had not been witnessed
12 facsimile signatures
7.5 Chasing payment
This section deals with the problems of
cash flow from both sides of the fence:
people who have to make apologies for
non-payment and people who are insistent
on receiving their rightful payments. It
consists of an integrated activity. After step
A the main skill practiced in this section is
that of writing.
7.5 A
This is an exercise in listening for gist.
Students should compare their answers in
pairs.
Answers
True: 4,6 False: 1,2,3,5
7.5 B Complete the first reminder letter.
 Dear Hr Becker,
 According to our records, payment of our invoice, no. 35823, sent to
you last March, has not yet been made.As specified on all our
estimates and invoices our terms of business are 30 days net. Your
invoice has now been outstanding for 90 days.
 In the case of unsettled debts of this duration it is our company
policy to take legal action. We would naturally prefer not to have to
go so far.
 Would you please send us a cheque by return? In case you have
lost/mislaid the original I am enclosing a copy of our invoice.
 We look forward to receiving your payment by return.
 Yours sincerely,
 Valentina SantinelliValentina Santinelli
 (Credit Controller)
Answer to 7.5 B
 Dear Mr. Becker,
 May we again remind you that this account is
still overdue?
 I would like to remind you also that our business
terms are 30 days. We supply goods on the
understanding of payment by the proper time.
 May we ask to settle your account. by return.
 Yours sincerely,
 Valentina Santinell
 Valentina Saxttinelli
 (Credit Controller)
Sum-up
In this unit, we learnt:
To use and practice monetary English in
some of the most relevant settings.
Assignment
Role-play the telephone conversation,
exchanging information.
Write to make enquiries by letter and fax.
Write to answer enquiries by letter and fax.