Placing an order
Companies buy and sell goods and to do so they need to deal with orders. Typically orders have a date and a reference number and are usually written on a company’s official order form.
Order - example:
Order no. – this is the reference number of your order; use it when referring in correspondence or telephone calls
Quantity – this is how many you order
Item description – this is what you order; usually you write here the size, colour, etc.
Cat. No. – this is the number of the item you can find in the catalogue
Price – this is how much each item costs
When making an order you usually produce a covering letter where you inform the buyer that you are enclosing your order, confirm terms of payment, discounts and delivery.
Please find enclosed our order No AB 1234/2020.
Although we anticipated a higher trade discount than 15%, we will place an initial order and hope that the discount can be reviewed in the near future. We would like to confirm that payment will be made on delivery.
If you do not have any of the items we have ordered currently in stock, please do not send alternatives.
We would appreciate delivery within the next two weeks, and look forward to your acknowledgment.
Enc. Order No. AB 1234/2020
A covering letter helps you add any necessary points and confirm the terms that have been agreed.
See below what you should include in your covering letter while placing an order.
Profit and Loss account or Income Statement
Profit and loss account or also known as the income statement is one of the major financial statements (others include: balance sheet, the cash flow statement, the statement of stockholder’s equity).
Profit and loss account shows the profitability of a company in a given period of time.
There are certain elements in the P&L which refer to revenues or gains from a certain type of activity or expenses and losses:
Take this short quiz to check what you already know:
1. Amounts earned by a company in its main operating activities are: a. Revenues
2. A company sells a car that is no longer used in its business. The amount received is more than the book value of the asset. The company will report a(an):
3. Is a company’s Interest Expense:
a. an operating expense or
b. a non-operating expense?
4. Net Sales minus the Cost of Goods Sold (COGS) equals:
a. Gross profit
b. Net income
5. Gross profit minus Operating expenses is also known as:
a. Net income
b. Operating income
Now check your answers below.
Would you like to learn more about accounting in English?
Key: 1. a/ 2 b / 3 b/ 4 a/ 5 b
Profit and loss account (P&L) or Income Statement – Rachunek Zysków I Strat
Profitability – rentowność
Revenues – przychody
Gains – zyski finansowe
Expenses – wydatki
Losses – straty
Operating activity – działalność operacyjna
Investing activity – działalność inwestycyjna
Financial activity – działalność finansowa
Single-step – format uproszczony
Multiple-step – format kalkulacyjny
Net income – przychody netto
Cost of goods sold – koszt sprzedanych towarów
Book value – wartość księgowa
Interest - odsetki
What is double-entry bookkeeping?
There are many business transactions that must be recorded in separate accounts, for example: sales, purchases, debts, expenses, etc.
Each transaction is recorded in a separate account – cash account, the liabilities account. The bookkeepers use a system that records two aspect of every transaction – double-entry bookkeeping.
Every transaction is both a debit – a deduction – in one account and a credit – an addition – in another. For example, if a company buys raw materials for production, it debits its purchases account and credits the supplier’s account.
Each account records debits on the left and credits on the right. The total debits should always equal the total credits. Accountants and bookkeepers call these accounts T-accounts, because they look like a ‘T’ letter - look at the examples below.
Double-entry bookkeeping – zasada podwójnego księgowania
An account - konto
A debit – ‘winien’ – lewa strona rachunku rozliczeniowego, obciążenie
A deduction - potrącenie
A credit – ‘ma’ – prawa strona rachunku rozliczeniowego, uznanie
An addition - dodawanie
An asset – składnik aktywów
A liability – zobowiązanie
To increase – wzrastać
To decrease – zmniejszać się
Do you work in accounting and need to speak English?
I can help, contact me.
Are your relationships harmonious?
''We can improve our relationships with others by leaps and bounds if we become encouragers instead of critics.''
Maintaining good relationships is crucial not only in private life, all good businesses are based on trust and healthy relationships. How to talk about them? Find out more.
Maintain, Strengthen, Foster, Build up, Cement, Cultivate, Encourage, Establish, Improve, Promote
- they all mean more or less that we work on our relationship and build it.
The company strengthened its sales force after the merger.
We are improving relations with customers thanks to better communication.
They always try to maintain proper relations with their suppliers.
– mean that the relationship was disrupted somehow and now we want to bring it back to the previous state.
We managed to restore our relations with the customer who was dissatisfied with our delay in delivery.
Endanger, Sour, Damage, Disrupt, Jeopardise, Sever, Undermine, Strain – all mean more or less that we don’t do much or enough to keep the relationship or even do something negative to damage it.
A strike at our factory disrupted production for several weeks.
Poor after-sales service undermined relations with customers.
His lack of negotiation skills jeopardised the deal.
Cordial, Healthy, Harmonious, Good, Strong, Friendly
We have very healthy mother-daughter relationship.
Their relations were rather cordial.
Strained, Stormy, Broken, Failed, Rocky, Uneasy, Volatile
Their relations were stormy after the argument they had the other day.
Britain has rather volatile relations with EU.
Collocations for Key Business Words
What is a collocation?
It’s a pair of group of words that often go together. They can be made of a verb + noun (set up a business), adjective + noun (direct costs), noun + noun (market leader). You should learn how words combine to sound natural and be more fluent in English.
Collocations for key business words – Verb + …
Verb + a COMPANY
Set up / establish / start a company
The company was established in 1997.
Buy / take over / acquire a company
We are planning to take over our main competitor.
Leave / resign from a company
She resigned from a company because she found a better job.
Manage / run a company
We have been running our company since 2001.
Verb + a CONTRACT / an AGREEMENT
Change / alter / amend a contract
We will have to amend the contract as our situation has changed.
Break / breach a contract
They breach the contract and didn’t supply the goods on time.
Negotiate a contract
The company needs to renegotiate the contract with its suppliers.
Draw up / prepare a contract
I won’t be able to draw up the contract by the weekend.
Enter into / conclude / make a contract
We concluded the agreement on 21st May.
Renew / prolong a contract
They wish to renew the contract.
Terminate a contract
Because our supplier doesn’t meet the provisions of the contract, we need to terminate it.
Verb + COSTS
Bring down / cut / reduce costs
The costs are too high and we need to cut them.
Who will cover the costs of transportation?
The company incurred costs associated with retraining its stuff.
Pay / meet costs
We will have to pay the costs of new software implementation.
Verb + a CUSTOMER / a CLIENT
Attract a customer
What can we do to attract new customers?
Deal with a customer
My main responsibility is to deal with customers and meet their needs.
Look after / take care of a customer
In our company we really look after our customers.
Lose a customer
We can’t afford to lose this client.
Do you want to learn more collocations? Schedule your lesson with me, contact me.
DEPRECIATION VS. AMORTIZATION
When do accountants use the term ‘depreciation’ or ‘amortization'?
When they talk about different types of fixed assets (fixed – assets which are not likely to be converted quickly into cash).
Depreciation – it is a reduction in the value of a tangible asset (e.g. land, machinery, vehicles, equipment, inventory) over time due to wear and tear.
Amortization – it is a reduction in the value of an intangible asset (the one that is not physical in nature e.g. Goodwill, brand recognition, intellectual property) over time.
METHODS OF DEPRECIATION
The popular methods of depreciation include:
Straight-line – depreciation is in equal amounts over the estimated life of the asset.
Double Declining Balance - is an accelerated method, which counts as an expense twice as much of the asset's book value each year compared to straight-line depreciation.
Unit-of-production - is usesuful when an asset's value is related to the number of units it produces and not necessariliy the number of year it is in use.
Let’s compute depreciation using the Straight-line method:
Cost – how much the company paid for the asset
Salvage Value (residual or scrap value) – the estimated book value of an asset after depreciation is complete
Estimated life of asset / Useful life – the estimated number of years the asset is likely to remain in service
Annual depreciation – yearly depreciation
e.g. The company purchased a car for PLN 40.000 – cost of asset, estimated life – 5 years, estimated salvage value – PLN 8.000
Cost – Salvage Value/Estimated life = Annual Depreciation
PLN 40.000 – PLN 8.000/5 years = PLN 6.000
Therefore the annual depreciation of this tangible asset (a car) will amount
Below you will find the glossary of terms (EN-PL) and a video explaining the above mentioned methods of depreciation:
Glossary – EN – PL:
Depreciation - amortyzacja środków trwałych materialnych
Amortization - amortyzacja środków trwałych niematerialnych i prawnych
Assets - majątek, środki
Fixed asset - środek trwały
Tangible asset - środek trwały materialny
Intangible asset - środek trwały niematerialny
Reduction in value - spadek wartości
Goodwill - wartość firmy
Straight-line depreciation - metoda liniowa amortyzacji
Declining-balance depreciation - metoda degresywna amortyzacji
Units-of-production depreciation - metoda amortyzacji przypadająca na jednostkę wyprodukowaną
To compute - obliczyć
To purchase - zakupić
Salvage / scrap / residual value - wartość umorzeniowa, cena po amortyzacji
Estimated life of an asset / Useful life - czas użyteczności środka
Annual depreciation - amortyzacja roczna
- teacher of English
- interpreter PL-EN, EN-PL
- B.A in English Linguistics, M.A in Linguistics, Sworn and Business Translations, Financial Analysis and Reporting
- over 18 years experience teaching and designing materials
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