Forms Of Trade Acceptance
Description
This section is from the book "Modern Banking; Commercial And Credit Paper", by Frederick Silver. Also available from Amazon: Modern banking; Commercial and credit paper.
Forms Of Trade Acceptance
The following forms of trade acceptances are given for the convenience of commercial and financial houses, from which a choice may be made of a particular form which is best adapted to their use. The principles involved in the use of trade acceptances being the same, the only difference in the following is in the wording:
Commercial Banking and Credits Form of Trade Acceptance Adapted for General Use
Form of Trade Acceptance Adapted for General Use
Form No. 6 Form of Trade Acceptance Adapted for General Use
Form No. 7 Form of Trade Acceptance Adapted for General Use
Method of Propaganda used by Commercial Houses to encourage the use of Trade Acceptances
Before you decide how you will settle the accompanying: account may we request you to consider the three methods by which purchases of "American Merchandise" products may be retired. | ||
NO. 1 Discounting less 2% 10 days from date of shipment. | NO. 2 Completing and returning; the Trade Acceptance or Negotiable Receipt attached. | NO. 3 Making payment net, SO days from date of shipment. |
Result A saving to you of 2% in return for the investment of your capital in goods which you have yet to sell. | Result A saving of 1% in cost, and 60 days' time during which you may use the receipts coming in from the sale of the goods before you will be called upon to make any investment in them. The strengthening of your credit standing by advertising your promptness in meeting obligations. | Result Necessitates paying full price for goods which might be purchased for 99% of list price. Parting with full cost within 30 days when by cooperation and taking advantage of up-to-date methods 60 days' time might be legitimately taken. |
It Is evident that methods No. 1 and No. 2 lead to profitable results while method No. 3 is unprofitable to purchaser and seller alike. Purchasing on an open-account basis is rapidly becoming to be looked upon as unprofitable, Inefficient and therefore obsolete. Give Trade Acceptances on Discount.
Form No. 8 illustrates a method of propaganda used by commercial houses to encourage the use of Acceptances, it points out clearly the usual forms of settling accounts and the advantages and disadvantages which accompany such modes of settlement.
Method employed by commercial Houses to point out the advantages in use of trade acceptance
American Merchandise Distributing Co. Products are Cheaper if purchased on acceptance terms instead of open account.
Had you accepted the draft sent you with original invoice of $ 100 this purchase would have cost you but $ l00 a saving of $ 100, and you would have had until........
........19...., to make settlement into the bargain.
In other words you can carry American Merchandise Distributing Co. products without investing a $ $ $ of your capital providing you can turn a jobber quantity of our goods in 60 days.
Next Time Why Not Settle Via The Trade Acceptance It Will Pay You And Prove Convenient.
This form is sent to purchasers, with a receipt for cash settlement, pointing out the advantages in the use of the trade acceptance as a means of settling accounts. It is, as the preceding form, a good method of propaganda encouraging the use of trade acceptances.
Form No. 10 Acceptances in Foreign Countries (Canadian Practice)
Form of Specific Assignment of Account. (Reduced size) Attached to trade paper drawn on firms who will not accept drafts.
Form Reduced Size Union Dank of Canada Toronto
Reasons for Returning Attached Bills are Crossed X.
Not due.
Ho funds.
Will remit No account.
Office closed.
Party will write.
Party hat written.
Party in difficulties.
Not sufficient fund*.
Goods not received.
Amount not correct.
Goods not as ordered.
No instructions to pay.
Cannot pay at present Will not pay exchange.
Wants extension of time.
Not In town at present.
Payment stopped by makers.
Notice given but no response.
Claims credit of goods returned.
Reasons endorsed on back of bill Payment refused-no reasons given.
Acceptance refused-no reasons given.
Acceptance refused-paid.
1/2 Size Hold reasonable time for arraival of goods if unaccepted ascer- tain definite reason and report Union Bank Of Canada Toronto
"Hold for Arrival of Goods" slip usually attached to "sight" bills and to bills drawn contempor-aneously with shipment of goods.
"Reasons for Refusal" slip-attached to bills returned unaccepted or unpaid.
Explanation - Form No. 10 Forms Nos. 10 a, b, and c, illustrate to what extent the acceptance idea prevails in other countries (Canadian practice).
Form No. 10 a, above given, is used in assigning accounts to a bank, should a purchaser refuse to accept trade paper.
Form No. 10 b, accompanies the bill, and in the event of "refusal to sign" by the customer, the reason for such refusal is required to be indicated thereon.
Form No. 10 c, is at times necessary in view of the fact that goods might arrive subsequent to the time of presentation of the bill for acceptance. The necessity of this mode of procedure arises mostly in foreign trade transactions, where the "acceptor" is not inclined to obligate himself to pay at a future date with the possibility of the goods not arriving:.
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