February 01, 2017

Business Letters Theory - Parts, Formats, Punctuation, kinds

February 01, 2017

The medium used for written messages to persons outside the organization is business letter. Business letters are different from personal and private letters. It is more formal than personal letters. In business letters generally a letterhead is used for the first page.

In this article we will discuss business letters theory in detail by the following topics.

1. Parts of business letters.

2. Formats of business letters.

3. Punctuation styles.

4. Kinds of business letters.

5. Difference between sales and sales promotion letter.

Kinds of Business Letters

Parts of Business Letters

Most business letters have seven different parts.

1. Heading
2. Inside address
3. Salutation
4. Body
5. Complementary close
6. Signature area
7. Reference section

If necessary, any of these additional parts can be included:

1. Attention
2. Subject
3. File or reference number
4. Enclosure
5. Carbon copy (cc)
6. Mailing mode
7. Post script (P.S)

The detail of parts of business letters are following.

1. Heading: The heading contains the name and address of the company sending the letter. It may contain phone number and Email address. Date is also the part of heading that may be written two lines below the last line of the heading. The date may be typed at the left margin, centered or written at the right margin.

2. Inside address: The inside address includes name and address of the person or organization to whom the letter is sent. The inside address always written on the left margin of the letter. For example:

Mr. Qadir Shah, MD
Premium Industries
Burns road, Karachi

3. Salutation: The salutation is typed two lines below the inside address and with the left margin. A colon may or may not follow the salutation depending upon the format of a letter. Following salutation may be used. For instance:

Dear Mr. Javed:

Dear Miss Fatima:

Gentlemen: (for plural)

Ladies: (for plural)

Avoid duplication of titles.

Wrong: Dr. Waseem, M.D

Correct: Dr. Waseem or Waseem, M.D

Whenever possible also avoid Dear Sir and Dear Madam because these salutations are impersonal.

4. Body: The body of a letter contains the message you want to send. Following guidelines should be deemed for body section.

1. Organize the message.

2. Keep first and last paragraph relatively short.

3. Achieve C qualities such as correctness, clarity, confidence, conversational tone, completeness, courtesy, conciseness, concreteness, and consideration.

5. Complementary close: The complementary close is typed two lines below the last of the body. The most frequently used of complementary closes are:
  • Yours truly
  • Yours sincerely
  • Yours respectfully
  • Best regards
  • Any time
It should be noted that a comma may or may not be used depending upon the format of the letter.   

6. Signature area: You can include in the signature area four separate identifications such as name of your company, your signature, your name, and your designation.

7. Reference section: The reference section includes the name of the dictator of the message and the typist. It is written two lines below the last line of the signature area. For example:


Letter Formats

A letter may be designed in the following formats.

1. Full block format.
2. Modified block format.
3. AMS simplified format.
4. Memo format.
5. Hanging paragraph format.

1. Full block format: In this format every part of letter such as date inside address, salutation, paragraph, complementary close and signature begins from left margin.

2. Modified block format: In this format paragraphs begin at the left margin with or without indentation (making first line of a paragraph shorter). Date, complementary close and signature appear at the centre or at the right of the letter.

3. AMS simplified: This format has suggested by the Administrative Management Society of US. All lines begin flush with left margin. In this format salutation and complementary close are omitted but to personalize reader’s name is used in the first line of the first paragraph. Subject line is typed in place of salutation and the word “Date” is omitted. It is modern and time saving format.  

4. Memo format: This format is used when your receiver is within the same organization. It resembles AMS simplified format in that it does not use salutation and complementary close. It may be labeled with “Memo” or “Memorandum”. Its heading includes the date, recipient’s name, sender’s name and a subject line. For instance:


5. Hanging paragraph: This format is generally used in sales and advertising letters. All lines of the paragraphs are intended except the first line of each paragraph, which begins flush with the left margin.

Punctuation Styles

The two forms of punctuation most used in business letters are:

1. Open punctuation.
2. Mixed punctuation.

Open punctuation: In open punctuation we don’t use any punctuation after every line of the heading, inside address, salutation, and complementary close. It is used with modified block format. It may also may be used with other formats such as AMS simplified, modified block, hanging paragraph, and personalized formats.


Dear Mr. Asif

Yours truly

Mixed punctuation: It is the most popular style in business environment that a colon follows the salutation and comma follows the complementary close. Mixed punctuation is used with modified block format.


Dear Mr. Ali:

Yours sincerely,

Kinds of Business letters

Following are the kinds of business letters.

1. Announcement letters.
2. Transmittal letters.
3. Adjustment letters.
4. Job letters.
5. Complaint letters.
6. Inquiry letters.
7. Order letters.
8. Sales letter.
9. Sales promotion letters.

1. Announcement letter: An announcement letter is written to convey information or make some announcement. It is also known as circular letter. Announcement letter may be written to only one person or to the members of various groups. Those announcements that are directed to persons within an organization usually have memo format. The contents of announcement may include sales and events, procedures, policies, responsibilities, activities of people, celebration, shifting of business etc.

2. Transmittals: The transmittal letter is written to transfer something such as cheque, document, form, passbook, booklet, map, report to a customer or business house. The item which is transferred is usually mentioned in the first paragraph. Transmittals may be with discussion or without discussion depending upon the situation. If your action is routine, you can transmit the documents   without explanation.

3. Adjustment letter: An adjustment letter is the reply to a complaint. It is the best attitude to give the customer the benefit of any doubt. Most persons are honest in their claims and it is better to make the desired adjustment than to risk losing a customer. The ultimate success of adjustment letter depends not only upon what the company says but also how the company says. Adjustment may be in the following forms.

a. Granting the claims.
b. The seller is at fault.
c. The buyer is at fault.
e. When the fault is not yet determined and will be investigated.

4. Job letter: A job letter comes under the category of sales letter because in job letter a candidate is like a product. It is used by a candidate to offer his services to the prospective employer. It may be solicited or unsolicited. Solicited job letter is written in response to advertisement appearing in newspaper, magazine, website etc. unsolicited job letter is written to discover the job opportunity.  

5. Complaint letter: A complaint letter is written when a product or service is not received according to an order. In the following areas errors may occur:

a. The wrong goods are sent.
b.The goods are defective.
c The goods are not delivered according mentioned place and time.
d.The quality of goods is not satisfactory.

While making complaint for poor condition of a product, state all the relevant facts logically, courteously, without exaggeration or irrelevant materials. For getting solution of your complaint you may request one or more of the following depending upon circumstances.

a. A new shipment of the correct product.
b. Free replacement of the defective productive.
c. Repair free of charge.
d. Reduction of price because of defective productive.
e.Correction of billing error or invoice.

6. Inquiry letter: An inquiry letter is written to seek information about the product, firm and person. Inquiry about product may be:

a.Price of the product.
b. Warranty of the product.
c. Ordinary or special discount.
d. Inquiry about credit facility and its period.
e. Mode and charges of delivery.

Inquiry about candidate may be:

a. The reason for leaving previous job.
b. The attitude with his seniors and colleagues.
c. The satisfaction of candidate’s ex-employer.
d. The habits and characteristics of the candidate.

Inquiry about firm:
Before granting credit to any firm, the seller should try to discover the purchaser’s financial position. He should inquire about the following points.

a. Market image of the firm.
b. It’s dealing with customers and suppliers.
c. Inquiry about payment habits.
d. Financial position.

7. Order letter: An order letter is written to seller in order to sell goods and services. A good order letter should contain the following points.

a. Give detail of the product such as name, brand, grade, size, color, design and model.
b. The number of required product.
c. Mode of payment.
d. Mode of delivery.
e. Time allowed for the delivery.

8. Sales letter: A sale letter is convenient and effective way of securing business. It is written with an intention to sell goods and services. It is different from personal selling in that a salesman speaks the words while in the letter the words are written and read. There are two major types of sales letter:

1. Solicited sales letters.
2. Unsolicited sales letters.

Solicited sales letters are written in response to a request for information about product or service. Such letters are written to those customers who want to get more information about product or service.

While unsolicited sales letters are written to prospective customers without their inquiry about the product. It is a sort of selling by mail.

9. Sales promotion letter: It is written to build or form goodwill, Such as to congratulate someone, to welcome someone, to thank someone, or to show sympathy for someone. Its aim is not to sell a product directly but to promote it in a way that reader is motivated to check out a demo.

 Difference between Sales and Sales Promotion Letter

1.  A sale letter is direct offer for sale of goods. While a sale promotion letter is an indirect offer for sale of goods.

2. A sale letter is written with a definite objective to sell something. A sale promotion letter is mostly written to build goodwill.

3. Sale has a set pattern. Sale promotion letter has no specific patter.

4. Sale letter is written to urge the reader to buy. Sale promotion letter is written to induce the reader to buy.

5. Sale letter is written in formal language. While sale promotion letter is written in informal language.

6. In sale letter product are introduced. In sale promotion letter products are not directly introduced.


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