What Is a Purchase Letter?
A purchase letter is a letter that states the intention of a company to avail of the products and services of another company. It's a legally binding document that both parties should agree on.
How to Write a Purchase Letter
A business wouldn't survive without purchasing essentials to keep it going. Business owners do a lot of buying and transacting with other businesses. A lot of requests, inquiries, cancellations, and agreements happen in between. You need to write a purchase letter if you need to buy essential things for your business.
If you need some ideas, read our tips below.
1. Set the Tone
Before writing your letter, keep in mind that you have to use a formal and businesslike tone. You're dealing with an entire business organization. However, don't forget to begin your letter with a warm greeting.
2. Give Background of the Purchase
State the item or items that you want to purchase. Be specific on its price and description. Set delivery date and location of the items, mode of payment, and advanced payment as well.
3. Specify the Terms
A purchase request won't be valid without some terms and conditions. Write down a list of the terms in the clearest way possible. Make sure that these terms are doable. Use simple language in explaining each term. You also have to agree on your rights and responsibilities for the items. These rights should be fair for both parties.
4. Prompt an Action
End your business letter on a good note. Put your contact information and tell them to call or message you if they have any questions regarding your conditions.
What are the types of purchase letters?
The website eForms said that the types of purchase letters are:
1. Business Purchase Letter of Intent - An agreement between a buyer and seller that's applicable to all businesses.
2. Real Estate Purchase Letter of Intent - A binding or non-binding agreement for purchasing a property.
3. Stock Purchase Letter of Intent - A letter that intends to purchase stocks from another company. This is common in big corporations.
Can you include an acceptance deadline in the purchase letter?
You can include an acceptance deadline for the vendor. That way, you're giving him a limit to accept or decline the offer. It's not like he's the only prospect you have in mind. Giving an acceptance deadline allows you to look for other vendors.
What makes a purchase letter binding?
Investopedia said that you can make a purchase letter binding when you use legal terms and mention that the business transaction is legal under the rule of court. A vendor should not always assume that a purchase letter is not legally binding. But it always depends on the letter's way of writing.
What are the objectives of a business's purchasing department?
The purchasing department of a business organization has these following objectives:
1. Pursue innovation
2. Lower costs
3. Improve the quality
4. Manage their relationships with the buyer
How do you know if a purchase letter is non-binding?
A purchase letter is non-binding if it doesn't mention a rule of court in the entire letter.