www.kozgazwarez.

hu
Angol szakmai kzpfok
kidolgozott ttelek
I. Agencies
When you export you may need the services of some kind of intermediary to ensure that the
goods reach the final user. Agents usually work in the country of the buyer.
Goods should be handled by agents when
A thorough knowledge of a distant market is needed
After-sales servicing is needed
You want to introduce goods to a new market
TYPES OF AGENTS
1. ommission agent! He obtains orders on behalf of the principal e!porter". He is paid
a commission on the business received from the area in which he operates. #ates of
commission vary$ if he has to supply a great deal of information and provide an after-
sales service% he will be paid more.
&. "el c#ede#e agent! 'he agent takes the credit risk on behalf of his customer% thus he
guarantees payment. He is paid a higher rate of commission.
(. Sole agent! He is appointed for a particular territory and is entitled to a commission
on all the business received from his area.
The main tasks of commission agents
)ollowing up orders
*hecking the e!porter+s documentation and transport arrangements
,nsuring payment in accordance with the agreed terms
He is the seller+s representative in the market
He doesn+t carry stocks
"IST$I%&TO$S
He also act as the principal+s agent but his usual task is to stock the product and supply local
buyers on demand. -sually he buys the product from the seller and re-sells it at such a price
that he makes a profit.
1
www.kozgazwarez.hu
Types of distributors
1. Sole dist#i'(to#! He has the e!clusive importing rights for a particular territory% and
all buyers are referred to him for their supplies of the product. He is the local stockist%
and the seller+s representative in that market. He provides after-sales services and
sends back information.
&. "ist#i'(to# )*o *as t*e goods on consignment! He doesn+t buy the goods he
receives from the e!porter% thus the stocks remain the property of the e!porter. 'he
distributor is only responsible for selling them and then accounting to the e!porter.
'his is ideal for stocks of a product% which is new or not yet in demand.
Sources of finding an agent
Advertising in trade .ournals
*ontacting government departments of trade
*onsulting *hambers of *ommerce% *onsulates% 'rade Associations and banks
Parts of the Agency Agreement
1. 'he names and addresses of both parties
&. 'he purpose of the agreement
(. A description of the goods
/. A territory to be covered
0. 'he duties of the agent
1. 'he duties of the principal
2. Any restrictions
3. 'he prices and terms
4. 'he remuneration of the commission agent
15. 6ayments for additional work
11. 'he starting date of the agreement and the e!tent of the notice to be given if the
agreement is to be terminated
1&. 'he arbitration procedure to be followed in the event of any disputes
+.
II. T*e Stock E,c*ange
T*e Stock E,c*ange is a highly organised financial market where bonds% stocks and shares
are bought and sold. 7t is a free market because the prices of securities move in response of
supply and demand. When a company invites the public to invest in it% the money is put to
permanent use. 'herefore the money cannot be returned to the investors because it has been
used. 'he only way that the shareholders can get their money back is by selling their shares to
someone else through the 8tock ,!change.
7f you want to buy or sell shares you can go to the local branch of your bank and tell them
what and how many shares you want to buy. 'he bank will turn to a '#oke#% who goes to the
8, on your behalf. 'he broker works for you on a commission% which is a small percentage of
what the shares cost.
&
www.kozgazwarez.hu
A sec(#it- is a written or printed document acknowledging the investment of money. 7t
covers all kinds of investment with which the 8, is concerned. 'he reward paid is called a
di.idend% because the profit is divided up among the shareholders.
TYPES OF SE&$ITIES T$A"E" ON T/E SE!
8ecurities fall into t)o catego#ies% 9fi!ed interest+ and 9e:uities+.
With fixed interest stocks the investor know in advance the amount of interest he is due to
receive. -sually% the rate of interest is truly fi!ed and is stated prior to investment.
Equities represent an e:ual share of the capital of the business% and an e:ual division of the
profits. ;othing is fi!ed in respect of e:uities < if the company does well% so does the
shareholder% if the company does badly% the shareholder may receive no return on his
investment.
(
www.kozgazwarez.hu
7. Gilt0edged sec(#ities government stocks" are bonds issued by the government of
the -=. 'he name conveys the impression of reliability. 'he investors are entitled
to a fixed rate of interest yield" at fi!ed dates redemption date" on the nominal
value.
77. 1ocal a(t*o#it- 'onds are issued by local authorities and the money invested
represents a loan to the authority.
777. "e'ent(#es are issued by companies when the investor lends money to the
company% and for his loan he is entitled to receive money in return% the interest. 7t
is also a kind of bond. >ebenture holders have no involvement in the management
of the company.
7?. S*a#es or stock certificates are documents stating that the owner has a share in a
specific company because he has invested money in it. 'hey entitle the holder to
participate in the ownership of a company and to receive its profits if there are any.
dividend" 'here are two main types of shares@
Preference shares 'heir holders have the right to receive dividends before
ordinary shareholders. ;ormally preference shares pay a fi!ed rate of dividend
but only if sufficient profits are available to make a payment. 'hey carry no
voting rights.
!rdinary shares "equities# 'hey represent a share in the ownership of a
company. ,ach share is entitled to an e:ual proportion dividend" of the
company+s profit. 'he amount of dividend to be paid is decided by the
directors of the company and is dependent upon the profitability of the firm.
Ardinary shares are known as 9blue chips+.
'he basic diffe#ence 'et)een a s*a#e and a 'ond is that shares represent ownership in a
company% while bonds represent money lent to a company or a government% at a certain
rate of interest.
T/E STO2 E3/ANGE 4ANI5A1S6
'hey are 9bulls+% 9bears+ and 9stags+. 'hey are called speculators rather than investors because
they trade in the market for short-term benefits% not long-term gains.
%(lls believe that the price will rise% so they buy shares and hope to sell them later for a
profit.
%ea#s think that prices will fall so they sell shares and hope to buy them back at a lower
price. When prices are thought to be rising% the market is described as bullish$ when they
are falling% it is called bearish."
Stags specialize in buying carefully selected amounts of newly issued shares before they
are traded on the 8,. 7f they are lucky% they sell these shares as soon as they are traded and
make a large% :uick profit.
/
www.kozgazwarez.hu
NE7 S/A$ES
Although new issues of shares are made outside the 8, on the 9new issue market+% application
is usually made for the shares of public companies to be listed :uoted" on the 8,. ;ew shares
are sold by one of the following methods@
Offe# fo# sale@ 7ssuing houses acting as agents on behalf of the company will sell the
shares direct to the general public. 'his may be done by publishing a prospectus about the
company.
Placing@ All the shares are 9placed+ in blocks with large buyers such as institutional
investors% for e!ample% pension or union funds.
$ig*ts iss(e@ 'hese are shares offered only to e!isting shareholders of the company at
lower than current market prices and in proportion to their shareholding. 'his method is
used to raise additional capital for a firm.
5E5%E$S/IP
Anly Bember )irms of the 8, are allowed to take part in dealing on the ,!change floor and
outsiders must carry out their buying and selling through them. 'he Bember )irms are called
CrokerD>ealers Crokers" and some of these specialise as Barket Bakers.
%#oke#8"eale#s@ 'hese are 8, Bember )irms% which buy or sell shares as agents for public
investors% or as principals for their own account with other Bember )irms or outside
investors% or they can act in a dual capacity as both agent and principal. 8ome of them are
specialise as Barket Bakers.
5a#ket 5ake#s@ 'hey can operate on the 8, floor% off-floor% or both on and off floor. 'hey
make a market in shares by being prepared to buy or sell shares at all times to and from
CrokerD>ealers. 'hey may deal direct with the CD>s on the ,!change floor% or indirect
through the 8,AE 8tock ,!change Automated Euotation 8ystem". Barket makers tend to
specialise in a particular range of securities% e.g. shares related to shipping% oilsF 'hey :uote
a double "two$way# price verbally and also on 8,AE% for e!ample% /&5 to /&3 < indicating
that he is willing to buy a certain share at /&5p and sell at /&3p.
Cargains are often carried out by private negotiation and sealed by verbal agreement. %y
word is my bond& < 'his is the motto of the 8,."
The staff of 'roker()ealers
7t consists of two groups@ 'hose who are engaged in work outside the SE% and those who are
involved with work inside the SE. 'he latter group can be subdivided into 9authorised+ and
9unauthorised+ clerks@
A(t*o#ised cle#ks have the authority to act on behalf of their principals and to enter into
transactions on their behalf.
&na(t*o#ised cle#ks are permitted to enter the House but do not have the authority to enter
into transactions.
0
www.kozgazwarez.hu
*lassification of stocks
'he Official 1ist is the ma.or of the ,!change+s three markets for the -= shares$ and the
7nternational 8tock ,!change+s >aily Afficial Gist is the list of official prices published each
day.
'he stocks% which the 8, deals with% are put into groups called alp*a9 'eta and gamma
stocks according to their trading volume.
'he (nlisted sec(#ities haven+t been admitted to the Afficial Gist and are traded on the -8B
-nlisted 8ecurities Barket". 'hese are usually medium-sized companies% which do not
:ualify for% or do not wish a full listing.
'he T*i#d 5a#ket is the ,!change+s market for small companies% which :ualify neither as a
listed company nor for the -8B.
&nit T#(sts are baskets of shares. 'hey are managed by professionals and are holdings in
various companies% which are divided into units. 6eople invest in unit trusts in order to spread
the risk rather than putting all their eggs in one basket.
&nde#)#iting is an arrangement by which a company is guaranteed that an issue of shares
will raise a given amount of cash.
:OA%&1A$Y
'o be responsible of sg reagHlva% vHlaszolva vmire
*ommission .utalIk
#eward .utalom% ellenszolgHltatHs
,:uities tJrzs"rIszvInyek
'o be due to sg .Hr neki% esedIkes vmi
6rior to sg vmit megelKzKen
*apital of sg tKke.avak"
'o convey sg kJzvetLt vmit
Yield hozam
8ufficient elegendK% elIgsIges
6roportion arHny
6rincipal megbLzM
7n a dual capacity kettKs minKsIgben
Cargain alku% Ngylet% NzletkJtIs
8ealed by sg megpecsItelve vmi Hltal
Authorised felhatalmazott
Authority to do sg engedIly% felhatalmazHs%
megbLzHs
'o admit sg somewhere felvesz% beenged vkit vhova
1
www.kozgazwarez.hu
III. 5a#ket #esea#c*
Barket research investigates what consumers are buying or are likely to buy in the future.
'he research is normally carried out before launching the advertising campaign. 'horoughly
carried out% market research can help to direct advertisers to the most economic and effective
way to run their campaign. 8ometimes market research is carried out after the product is
already well established in order to assess and improve advertising and evaluate product
performance.
Cefore making goods for a new market it is necessary to discover first of all if the goods can
be sold profitably in that market. 'o answer this :uestion is one of the ob.ects of ma#ket
#esea#c*% which ma- 'e ca##ied o(t to dete#mine!
a" 7f a new product is likely to find a market$
b" Whether an established product is likely to meet with brisk demand in a new market$
c" Why sales of a product have declined% either generally or in a certain area.
T/E AI5S OF 5A$2ET $ESEA$/ A$E
To find out what the public wants so that the business does not waste resources
producing goods or services that are not re:uired.
To assess likely volume of demand to ensure that overproducing does not
occur.
To discover what will influence consumers < product name% style and colour of
packaging best target audience% price range% and effective hidden persuaders"
A ma#ket #esea#c* campaign does not guarantee that a product will be successful% but from
it the manufacturer can learn what the attitudes of potential customers are% how some of them
will react to this product if it were on sale at such-and-such a price and what competition
already e!ists in his field.
In selling o.e#seas% market research is even more important and agents abroad can pass on
much valuable information to the e!porter. T*e e,po#te# m(st conside#9 fo# e,ample!
1. Physical and climatic conditions
&. Social conditions the high or low standard of living"
(. Traditions and customs habits of work% play and dress$ religion"
/. Existing products and structure of trade satisfactory locally-made products%
suitability of packaging% assurance of after-sales service"
0. The legal aspect safety regulations for vehicles and machinery$ left- or right-hand
drive for cars$ restrictions on the sale of drugs and any import :uotas"
%ethods employed in research
'hose carrying out market research find out the information they seek by asking a cross-
section of the public from all age-groups and social backgrounds" a number of carefully
designed :uestions. T*e ;(estioning is ca##ied o(t in a .a#iet- of places!
2
www.kozgazwarez.hu
IN T/E ST$EET9 S/OP O$ /O5E
'he researcher has a set of prepared :uestions. 'he answers to many of these :uestions can be
:uickly recorded by ticks in bo!es marked Yes or ;o.
<(estionnai#es ci#c(lated in s*ops o# *omes
A carefully constructed :uestionnaire must be@
,asy to understand
8imple to answer% perhaps by ticks
*apable of useful analysis fre:uently by computer"
Sampling
Bembers of the public may be invited to try the product% or compare one or more samples
and make constructive observations.
Test marketing may be carried out by selling the product in a small sample area in order
to assess likely demand prior to commencing full-scale production.
5a#keting #esea#c* is distinguished from market research in that while the latter deals with
the pattern of a market% the former deals with problems involved in marketing a particular
product. 7t starts with market research and then studies practical difficulties in selling and
deciding% for instance% what lines might be pushed in particular areas and what special
problems might be met in any particular region. 7t is concerned with the problems attached to
selling a particular product for a particular manufacturer% while ma#ket #esea#c* on the other
hand would tend to study the state of consumers+ demand in relation to perhaps a group of
products of the similar kind.
+ocabulary
'o refer to sg cIloz% hivatkozik% vonatkozik vmire
Appropriate alkalmas% megfelelK
'o entail sg maga utHn von vmit
#elated to sg vmire vonatkozM% vmivel kapcsolatos
'o dispose sg elrendez% elrendel vmit
'o split sg into sgs felosztani vmit
8ub-division alosztHly% alrIszleg
>eliberate megfontolt
8ustained effort kitartM% hosszas erKfeszLtIs% fHradozHs
'o maintain sg fenntart% ellHt% karbantart% tHmogat vmit
Butual kJlcsJnJs
*onviction meggyKzIs% meggyKzKdIs
6roduct life cycle termIk Iletciklus
6re-launch bevezetIs elKtti Hllapot
Baturity IrettsIg szakasza"
>ecline hanyatlHs
8aturated market telLtett piac
'o react reagHl% visszahat% hatHssal van vmire
'o persuade sy to do sg rHbeszIl% meggyKz vkit vmirKl
'o consider sg megfontol% figyelembe vesz vmit
3
www.kozgazwarez.hu
'o undertake sg elvHllal vmit% belekezd vmibe
'o put a product on the market egy termIket piacra dobni
7t is worthwhile to do sg Irdemes megtenni vmit
'o consume sg elfogyaszt% felhasznHl% felemIszt vmit
'o show a profit nyeresIget mutat fel
8teadily szilHrdan% egyenletesen
?igorous IleterKs% intenzLv
'o recognise the signal felismerni az elK.elet
'o improve sg fe.leszt% .avLt vmit
Appeal fellebbezIs$ vmihez folyamodik% hatHssal
van vmire
*ompetitive edge O"
'o become a driving force vezetK erKvI vHlni
-nderlying sg vminek az alap.a
'o put sy first vkit elsK helyre venni
>ivision osztHly% rIszleg
'o be urged to sg JsztJnJzve% siettetve% kInyszerLtve vmire
'o cause sy to do sg vmit csinHltat vkivel
)eatures and benefits .ellegzetessIgek Is elKnyJk
'o be aware of sg tisztHban van vmivel
'hreat fenyegetIs
'o take account of sg vmit szHmLtHsba venni
-ni:ue selling proposition dJntK IrtIkesLtIsi Irv
'o arouse one+s interest vki IrdeklKdIsIt felkelteni% felIbreszteni
'o investigate sg vizsgHl% tanulmHnyoz% kutat vmit
'o run a campaign lebonyolLtani egy kampHnyt
'o evaluate product performance kiIrtIkelni a termIk tel.esLtmInyIt
'o determine sg megHllapLt% elhatHroz vmit
'o meet with brisk demand IlInk kereslettel talHlkozni
Cest target audience a leg.obb cIlkJzJnsIg O"
6rice range HrskHla% Hrintervallum
Hidden persuaders re.tett JsztJnzKk
8uch-and-such a price ilyen Is ilyen Hron
8atisfactory kielIgLtK
Gegal aspect a tJrvIny nIzKpont.HbMl
A cross-section of the public a lakossHg reprezentatLv keresztmetszete
Euestionnaire kIrdKLv
6rior to commencing full-scale production a tel.es fokP termelIs megkezdIse elKtt
'o be distinguished from sg megkNlJnbJztetve vmitKl
'he latter az utMbbi
'he pattern of sg vmi formH.a% mintH.a% sImH.a
)ormer deals with sg vmi korHbbi megoldHsai
=.
4
www.kozgazwarez.hu
I:. 5one- and finance> T-pes and f(nctions of mone-9 %anking
se#.ices
%oney
T*e act of e,c*anging includes giving and receiving% accepting one thing for another.
5one- is a means$ it does simplify economic life. Boney is anything used by a society to
purchase goods and services.
TYPES OF 5ONEY
ommodit- mone- shells% tobacco% leather% fur..."
/a#d mone- bars and coins of precious metals"
Token mone- coins of any other metals"
Pape# mone- or soft money bank notes"
S('stit(te mone- bank deposits% che:ues% bills of e!change% 'reasury bills"
F&NTIONS OF 5ONEY
?. 5edi(m of e,c*ange! 'his is the primary function of money. 'he owners of products
accept it because they know it is acceptable to the owners of other products. Boney is
wanted not for its own sake but for the things it will buy.
@. 5eas(#e of .al(e! 'he prices of all products and resources are stated in terms of
money. 7t is the means that we use to compare products.
A. Sto#e of .al(e! Boney can be held and spent later. disposable income% discretionary
income% li:uidity"
/A$ATE$ISTIS OF 5ONEY
"i.isi'ilit-! Boney must be capable of division into smaller units in order to
accommodate small and large purchases.
Po#ta'ilit-! 7t must be small enough and light enough to be carried easily.
Sta'ilit-! Boney must retain its value over time.
"(#a'ilit-! 'he ob.ects that serve as money should be strong enough to last
through reasonable usage.
"iffic(lt- to co(nte#feiting
15
www.kozgazwarez.hu
'anking operations
T T$A"ITIONA1 $A"ITIONA1 SE$:IES SE$:IES
I. O11ETING "EPOSITS
"emand deposits! 'hey can be claimed immediately and no interest is paid on
them but no e!penses are charged by the bank.
Sa.ings deposits! 'he bank pays interest on them% and gives savings books or
passbooks to certify the deposit.
T#ansfe# deposits! 'hese are types of savings deposits for the payment of
public utilities.
Time deposits! 'hey yield a higher interest but are not immediately available.
'hese deposits are locked up for a specific period of time. Withdrawal from
them is carried out by a written notice.
II. 1EN"ING
O.e#d#aft! 'he current account holder may write out che:ues for more money
than there is in the account. 'hen the account is overdrawn or in the red. 'he
amount is the overdraft. 'his type is used for short-term borrowing.
1oan! 'he amount re:uested is transferred to the customer+s account. 'he loan
is repaid in regular fi!ed amounts including interest% over a specific period of
time.
%#idging loan! 7t is provided by a bank as a temporary measure for a very
short period until other e!pected funds become available.
III. OT/E$ SE$:IES
?. Acco(nts
(##ent acco(nt! 7t allows the owner to use a che:uebook but the money
doesn+t earn interest. 'he bank issues regular statements showing debit and
credit entries and the balance. Averdrawn is allowed.
"eposit acco(nt! 7t earns interest but it doesn+t allow the owner to use a
che:uebook. 'he rate of interest fluctuates. Withdrawal from a deposit account
is carried out by a notice.
@. Sa.ings acco(nt se#.ices
'hey enable the smaller saver to put money away for particular purposes.
ollection se#.ice! 'he bank is ordered to proceed against a debtor and
demand outstanding or overdue accounts. *ollection against documents%
opening documentary credits% preparing and presenting drafts% handing
commercial documents% settling payment promises."
$emittance! )inancial institutions transfer amounts from one bank account to
another.
11
www.kozgazwarez.hu
A. T#ansfe#
Standing o#de#! 'he bank makes regular payments of a set sum from one
bank account to another on behalf of the customer. 'his service is available to
current account holders% and useful if the transferred amount doesn+t change.
"i#ect de'it! *ustomers fill in and sign a form% which gives permission for a
payee to withdraw regular amounts from their account. 'he amount may be
varied.
%ank gi#o! 'his is a method of credit transfer of funds directly into the
account of someone else% who may hold his account at another branch or even
a different bank to the person making the payment. 7n-payment can be made
with cash or che:ue. 'he two basic type of credit transfer are
o Single t#ansfe#! *ustomers can make a single payment directly to a
stated bank account by printing bank giro credit forms at the bottom
of their bills.
o 5(ltiple t#ansfe#! 'he payee only writes out a single che:ue to
pay several bills or a number of different people.
B. %ank ca#ds
*e;(e ca#d! 'hey are issued by banks to reliable customers. 'hey are used
to guarantee payment of a che:ue up to a ma!imum amount% which is stated on
the card.
#edit ca#d! 7t is a financial service run by the commercial banks. 7t serves for
purchasing without using cash or che:ue. 'he cardholder signs for goods or
services and presents the card to the trader. 'he bank pays the trader and the
customer later pays the money to the bank.
E E1ET$ONI 1ET$ONI %AN2ING %AN2ING
7t is the newest service provided by financial institutions. ,lectronic )unds 'ransfer ,)'" is
a means of performing financial transactions through a computer terminal or telephone hook-
up. 'he system can be used in the following ways@
?. A(tomated Telle# 5ac*ines CAT5sD! 'hese can dispense cash from the client+s
current or savings account. 'hey can also accept deposits and provide information
about current account balances at all times.
@. A(tomated lea#ing /o(ses CA/sD! 'hey make debit and credit transfers between
banks easier% :uicker and safer. Garge companies can use them to transfer wages.
A. 7i#e t#ansfe#s! 'hey are :uick payment transfers between banks by the
communication system.
B. lea#ing /o(se Inte#'ank Pa-ments S-stem C/IPSD! 'o make inter-bank
payments easier% banks created a new type of electronic transfer organisation.
+. Point0of0sale CPOSD te#minals! 'hey are computerized cash registers located in a
retail store and connected to a bank+s computer terminal. Ance the customer is
1&
www.kozgazwarez.hu
identified% the 6A8 terminal automatically and immediately transfers the re:uired
amount of any purchase from the bank account to the store+s account.
N NON ON0 0 %AN2ING %AN2ING SE$:IES SE$:IES
E,ec(to#s*ips and T#(stee Se#.ices! Canks may be allowed to handle real estate or
personal property on the basis of trusteeship when people die.
In.estment Se#.ices! 'hey include safe custody of demand deposits and collecting yields
of these deposits.
Ins(#ance Se#.ices! Bost banks have 7nsurance >epartments to arrange all types of
insurance.
Economic Info#mation! Canks provide information on leasing agreements$ they perform
agency activity in factorisation. 7n the case of outstanding debts or drafts the act of
forfeiture also re:uires financial advice because forfeiture risks may include li:uidity%
transfer% e!change rate% commercial and political risks too.
+ocabulary
>isposable income rendelkezIsre HllM .Jvedelem
>iscretionary income tetszIs szerint elkJlthetK .Jvedelem
'o accommodate sg alkalmazni% alkalmazkodni
'o retain sg megKrizni vmit
*ounterfeiting hamisLtHs
'emporary ideiglenes
#emittance HtutalHs
'o dispense sg adagol% kioszt vmit
,!ecutorships vIgrendelet kezelIs% vIgreha.tHs
'rustee services vagyonkezelKi szolgHltatHsok
,state vagyon% hagyatIk-
*ustody letIt
E.
%anking s-stems C/(nga#ian and %#itis*D
,ungary
/ISTO$IA1 %A2G$O&N"
'he Hungarian banking system is linked historically to t*e A(st#ian 'anking s-stem.
Austrian commercial banks and saving banks% together with the central bank of Austria%
traditionally carried out their activities in Hungary as well as Austria.
After 14/0 a process began to nationalise t*e 'anking s-stem. 'he law stated the ownership
of the shares of ;CH and the main commercial banks. 'he p#ima#- f(nctions of N%/ as a
socialist central bank were developed in 14/3% and a one0tie# 'anking s-stem < which meets
the needs of a strictly planned and centralised economy - established. 7n this model the central
bank provides commercial bank functions% grants credits and accepts deposits from companies
and co-operatives.
1(
www.kozgazwarez.hu
T/E T7O0TIE$ %AN2ING SYSTE5
An Qanuary 1% 1432 comprehensive changes were introduced in Hungary+s banking system.
'he central and commercial banking functions were separated. 'he new t)o0tie# 'anking
s-stem < where the central bank is the bank of the banks% and the commercial banks are in
direct contact with companies < is intended to make the allocation of financial resources more
efficient. 'he new banking environment is based on the challenge of a macro-planned% market
oriented economy. 'he new system allows the ;CH to focus on macroeconomic policy
issues% leaving the microeconomic aspects of credit allocation to the commercial banks. 'hus
the N%/ is #esponsi'le fo# formulating and e!ecuting monetary policy% and the performance
of ot*e# t#aditional cent#al 'anking f(nctions% i.e.
7t issues bank notes and coins in order to ensure the amount of cash needed for money
circulation.
7t makes proposals for money and credit policy to be applied.
7t establishes the national payment and accounting system% determines the rules of money
circulation.
7t collects reserves of gold and foreign e!change end manages them.
7t makes proposals for e!ternal credit and e!change rate policy.
7t determines and publishes the official e!change rate of foreign currencies in terms of
)orints.
7t maintains contacts and coordinates the relations of Hungary with the international
financial institutions.
'he bank of issue en.oys complete independence in t*e fo#m(lation of its inte#est polic-%
while it m(st dete#mine t*e e,c*ange #ate polic- .ointly with the government.
When the two-tier banking system was started in Qanuary 1432 the comme#cial 'anking
tasks related to the company and entrepreneurial sector keeping of accounts% financing%
active and passive banking operations% etc." were taken over by three new big commercial
banks
Hungarian *redit Cank Gtd. BHC"
*ommercial and *redit Cank Gtd. =HC"
Cudapest Cank Gtd.
And by the Hungarian )oreign 'rade Cank Gtd which had already been functioning earlier
and had a lot of e!perience. At the start the clients were allocated among the banks% but at
present clients a#e al#ead- f#ee to c*oose t*ei# 'ank.
'anking services
Canking services to the population and private entrepreneurs were p#o.ided '- the ;ational
8avings Cank A'6"% 8avings *ooperatives and 6ostabank% which at that time were not yet
active in the company sector.
Ceyond this% at the start of the two-tier banking system ?+ non0moneta#- financial
instit(tions functioned in Hungary. Among these the State "e.elopment Instit(te% as the
legal successor to the 8tate >evelopment Cank% had a functionally decisive weight% as it was
specialised in the financing of outstandingly important development pro.ects. T*#ee 'anks
)it* fo#eign pa#ticipation had also functioned already prior to the establishment of the two-
tier system. 'he financial institutions specialised in enterprise and innovation% as well as
financial institutions of a non-banking character ins(#ance companies" were participants in
the money market.
1/
www.kozgazwarez.hu
The reforms of -anuary ./ .012 aimed at
)acilitating greater competition with the banking system
>eveloping a market-based system of resource allocation
Assuming a profit-oriented approach
>eveloping the skills to identify and balance profit opportunities against the corresponding
risks
7n Qune 1432 commercial banks were given the #ig*t to compete for corporate customers and
companies corporate customers" became free to choose their bank.
The integration of the company and population banking activities
7t started in Qanuary 1% 1434. 'hus the commercial banks and the financial institutions
functioning like 'anks 'ecame a(t*o#ized to ca##- o(t 'anking t#ansactions both for the
companies and for the population. 'he integration made possible also the liberalization of the
interest rates on the population+s deposits and credits.
The first step of the decentrali3ation of foreign exchange operations
'he ;CH authorized the comme#cial 'anks to collect fo#eign e,c*ange deposits from
foreign economic entities not :ualified as banks% form private persons and from domestic
economic entities% which were entitled to open foreign e!change accounts.
7n 1445 the bank of issue f(#t*e# e,panded t*e entitlement of t*e comme#cial 'anks to
carry out the foreign e!change transactions related to convertible currency trade% to administer
the commissions as well as costs related to trade. Cesides the Hungarian banks built up the
c*ain of fo#eign co##esponding 'anks necessary for the above services% and with the
agreement of the ;CH they can keep 4nostro accounts5 with the selected foreign banks and
on sight 4loro accounts5 for the foreign banks.
The law on financial institutions and on the activity of financial institutions "The 'anking
Act#
7t was entered into force on >ecember 1% 1441. 'his law wants to p#o.ide p#otection to those
who place deposits and savings with the financial institutions% protects the competitors
participating in the money and capital market% the consumers who avail themselves of the
services of the financial institutions. Cut it wants also to protect the integrated system of the
money and capital market% its workability through enhancing the solvency of the financial
institutions and the security of their activity.
A further important element of the Canking Act is the p#o.ision of e;(al c*ances in
competition. Cut at the same time% only those players should be able to enter the money and
capital market who will work in a stable way in the longer term run too. )or the sake of this
stability the law stipulates the formation of reserves in order to moderate the risks of
operation and for the sake of solvency.
Supervising the banks
'his is the task of the state on the basis of the Canking Act% and it is embodied by the State
%anking S(pe#.iso#- A(t*o#it-. 'he work of this institution is assisted by the Canking
8upervisory *ommission.
10
www.kozgazwarez.hu
G$EAT %$ITAIN
%AN2 OF ENG1AN"
7t plays the prominent role as the country+s central bank% and at the hub of most banking
activity. 'he Cank or 9'he Ald Gady of 'hreadneedle 8treet+ is at the centre of the Critish
banking system% and plays a ma.or role in controlling the monetary system. 7t was
nationalized in 14/1 and is controlled by a court of directors appointed by the state.
6unctions of the 'ank
7& 7t is the government8s bank
'his is the ma.or function of the bank.
7t manages the government+s banking accounts.
'he Cank advises the government on formulation of monetary policy and assists the
government in carrying out the monetary policy.
7t also handles the arrangements for government borrowing. 8hort term < mainly through the
sale of 'reasury bills$ long term < by management of government stocks"
7t manages the e!change e:ualisation account by influencing the value of sterling by selling
or buying pounds to affect the foreign e!change market prices.
77& 7t controls the note issue
'he Cank has the sole responsibility for the issue of bank notes in ,ngland and
Wales.
777& 7t is the bankers8 bank
,ach of the clearing banks has an account with the Cank% and during the process of
che:ue clearing debits and credits are made to these accounts as a means of
interbank settlement.
'he clearing banks keep about a half of their li:uid reserves deposited at the Cank
and use these for settling debts among themselves.
'he commercial banks rely on the Cank if run short of money or re:uire loans.
7+& 7t has international responsibilities
'he Cank provides services for other central banks and some of the world+s ma.or
financial organisations such as the 7B).
+& 7t is the 9lender of last resort8
7f the commercial banks run short of cash they recall deposits they have in the
money market. 'his leaves the discount houses short of funds. 'he Cank 9lends as
a last resort+ to the discount houses.
"ISO&NT /O&SES
'he Gondon >iscount Barket Association consists of twelve companies basically concerned
with borrowing and investing money on a short-term basis.
The main functions of the discount houses are
Accepting very short-term deposits from businesses in return for a low rate of interest
-sing funds raised in this way to purchase a variety of assets treasury bills% bills of e!change
and gilt-edged securities"
6roviding immediate finance for companies by discounting reliable bills of e!change
11
www.kozgazwarez.hu
1EA$ING %AN2S
'hey handle the e!change and settlement of che:ues through the clearing house system. The
functions of clearing banks are as follows
Acceptance of deposits of money
6roviding a system of payments mechanism
8upply of finance
6rovision of a wide range of services
T$&STEE SA:INGS %AN2 CTS%D
7t is a fully-fledged bank. 7t offers a variety of services similar to those of the other clearing
banks% and aimed at the personal customer.
*urrent% deposit and savings and investment accounts
*redit transfer facilities
Averdrafts% personal loans and mortgage loans
*ombined credit% che:ue guarantee card$ travel che:ues and foreign currency
STATE %AN2S
'he ;ational 8avings Cank is operated through the 6ost Affice. 'he ;ational Rirobank is a
state-run bank and is a part of the business of the 6ost Affice% but is financially independent
from it.
5E$/ANT %AN2S CAEPTANE /O&SESD
'hese are private firms that offer highly specialised service almost e!clusively for business
customers. T*e main acti.ities of me#c*ant 'anks are accepting house activities% issuing
house activities and capital market activities.
.& Acceptance house activities
'he traditional activity of merchant banks is 9accepting+% i.e. lending their name to
a bill of e!change issued by less well-known traders. Cy endorsing the bill% the
accepting house guarantees payment of the bill.
:& 7ssuing house activities
Berchant banks play a ma.or role in assisting in raising company finance by
sponsoring first issues of company shares on behalf of their clients% or acting as
intermediaries between companies seeking capital and those willing to provide it.
;& *apital market activities
Berchant banks are also involved in a wide range of other capital market
operations% such as
Aperating some current account services for customers
Accepting larger deposits
Affering consultancy services to businesses wishing to become limited liability companies
Advising on company problems
6roviding finance for hire-purchase% local government and industry
Aperating unit trusts
Assisting in investment of trustee funds for large institutions
Acting as agent to companies establishing branches overseas
>ealing in the precious metals market
12
www.kozgazwarez.hu
FO$EIGN %AN2S
'here are now about /55 foreign banks particularly from ,uropean countries" in Gondon
e!isting to give service and credit to companies from their own countries operating in Critain.
A number of these banks have e!panded their activities and they now make substantial
sterling loans to Critish borrowers.
FINANE /O&SES
'he )inance Houses Association )HA" consists of forty-three member companies who
control 35 per cent of the instalment credit business in the -=.
:OA%&1A$Y
8aving bank takarIkpInztHr
'o carry out sg tel.esLt% kivitelez vmit
6rocess folyamat% fe.lKdIs% el.HrHs
>eposit betIt% letIt
*omprehensive HtfogM% szIleskJrS
'o be intended to do sg szHndIkozik% tervezve van vmi cIlbMl
Allocation of financial resources Nzleti tKke-kihelyezIs
,nvironment kJrnyezet
*hallenge kihLvHs% feladat
'o issue sg eredmInyez vmit fn kimenetel"
'o issue bank notes bank.egyet kibocsHt
Applied alkalmazott% alkalmazHsra kerNlK
#eserves of gold aranytartalIk% aranykIszlet
,!change rate policy Hrfolyampolitika
7n terms of sg vmihez kIpest% viszonyLtva
'o maintain sg fenntart% ellHt% tHmogat vmit
Cank of issue .egybank
Qointly with sy ,gyNttmSkJdve vkivel
'o relate sg to sg Jsszekapcsol vmit vmivel
,ntrepreneurial sector vHllalkozMi szektor
'o take over sg Htvenni vmit
'o be allocated among sgs vmik kJzJtt elosztva
8uccessor .ogutMd% JrJkJs
6rior to sg vmit megelKzKen
'o assume sg felvesz% Htvesz vmit
*orresponding risks vele.HrM kockHzatok
*orporate customer .ogi szemIly O"
'o be authorized to do sg engedIlyezve% fel.ogosLtva vmire
,conomic entity gazdasHgi tHrsasHg O"
'o be entitled to do sg .ogosult megtenni vmit
#elated to sg vmivel kapcsolatban% JsszefNggIsben
'o administer the commission a .utalIkot kezelni O"
'he Canking Act banktJrvIny
'o avail oneself of sg igInybe vesz% hasznHt veszi vminek
'o enhance the solvency of sy nJveli% erKsLti vki fizetKkIpessIgIt
)or the sake of sg vmi kedvIIrt% vmi miatt
13
www.kozgazwarez.hu
'o stipulate the formation of reserves meghatHrozza a tartalIkkIpzIst
'o supervise sg felNgyel vmit
'o be embodied by sg megtestesNlve% testet Jltve vmi Hltal
6rominent role kiemelkedK szerep% .elentKsIg
Hub kJzIppont% kerIkagy
8tocks IrtIkpapLr% kJtvIny% tKke
,!change e:ualisation account Hrfolyam kiegyenlLtIsi szHmla O"
'o influence the value of sterling befolyHsolni a font IrtIkIt
'o affect sg T to influence sg befolyHsoln% kihat% Irint vmit
;ote issue bank.egykibocsHtHs
8ole kizHrMlagos
*he:ue clearing csekk elszHmolHs% kiegyenlLtIs O"
A means of interbank settlement bankkJzi elszHmolHsi mMd% eszkJz
'o be deposited at swhere betIve% letItbe helyezve vhol
'o settle debts adMssHgot kiegyenlLteni
Gender of last resort vIgsK hitelezK
'o recall one+s deposits felmond.a a betIteit
)und tKke% kIszlet% alap% fedezet
'o concern with T to deal with sg foglalkozik vmivel
Assets aktLvHk% vagyon% IrtIkpapLr% nyeresIg
Rilt-edged securities aranyrIszvInyek% IrtIkHllM IrtIkpapLrok
'rustee meghatalmazott% vagyonkezelK
'rustee savings bank takarIkpInztHr -=% O"
)ully-fledged kife.lett
Averdraft hiteltPllIpIs% szHmlahitel% technikai hitel
Bortgage loan .elzHloghitel
Berchant bank T commercial bank kereskedelmi bank
Acceptance house activities elfogadHsi tevIkenysIg
7ssuing house activities kibocsHtHsi tevIkenysIg
*apital market activities tKkepiaci tevIkenysIg
Hire-purchase rIszletfizetIs% bIrlIs
'o operate unit trusts egysIghitel-nyP.tHs O"
'rustee funds bizalmi tKke O"
6recious metalsDstones nemesfImek D drHgakJvek
'o make substantial sterling loans to sy tekintIlyes font-kJlcsJnt nyP.tani vkinek
7nstalment credit business rIszletvisszafizetIsi hitel O"
F.
14
www.kozgazwarez.hu
:. T-pes of '(siness
P$I:ATE ENTE$P$ISE
Cusinesses that are owned by private individuals some of the public" engaged in the
production of goods or services. 'here are fo(# main t-pes of business ownership in the
private sector of the economy@
8ole traders
6artnership
6rivate limited companies Gtd"
6ublic limited companies 6lc"
Special fo#ms of private enterprise are co-operative societies and holding companies.
P&%1I ENTE$P$ISE
'hese are industries and services owned by the state all of the public" and run by central or
local government. 'he two main types of public enterprise are
Bunicipal undertakings
8tate undertakings
&nlimited lia'ilit-
7f the firm that has unlimited liability goes bankrupt and cannot pay its creditors% the owner+s
personal possessions such as car or home and its contents can be taken and used to pay the
debts owed.
1imited lia'ilit-
'he liability of shareholders for the debts of a business is limited to the amount they have
invested in the business and not their personal assets.
P$I:ATE ENTE$P$ISE
Sole traders
'his type of firm is owned by one person who provides all of the capital needed to form%
operate% or e!pand the business. 'his is the simplest and most common type of enterprise.
Ad.antages! needs a relatively small amount of capital$ no consulting with partners$ no
sharing of profits$ knowledge of all aspects of the business
"isad.antages! the business has unlimited liability$ difficulty in continuing business in case
of absence$ division of labour may be difficult$ shortage of capital$ difficult to borrow money
Partnership
'wo to twenty members incorporate into the business and work together for profit with
unlimited liability. 7t is possible to have a limited partnership but at least one partner must
accept unlimited liability. A sleeping partner is one who invests in the business but takes no
active part in running it$ he is fully liable with other partners for debts.
&5
www.kozgazwarez.hu
Ad.antages! easily formed$ greater continuity than sole trader$ more people are available to
contribute capital$ e!penses and management are shared
"isad.antages! generally unlimited liability$ possible conflicts between partners$
membership limit
Private limited company "<td#
7t is allowed from two to an unlimited number of members shareholders". 'he capital of the
firm is divided into shares% but the shares are not sold on the 8tock ,!change and they cannot
be advertised for sale publicly. 7t is sometimes referred to as -oint Stock *ompany.
Ad.antages! more people can provide it with capital$ has greater continuity$ has limited
liability
"isad.antages! difficulty of capital raising because shares cannot be offered for public sale$
audited accounts are open to public inspection
Public limited company "Plc#
7t is allowed from two to an unlimited number of shareholders% and it can advertise shares and
debentures for public sale. 7ts shares are listed on the 8tock ,!change. When an investor buys
shares in a limited company he becomes a part owner and gets the right to some say in the
way that the company is operated. 'he shareholders elect a board of directors to decide
overall company policy% and a chairman is also elected to regulate board meetings.
Ad.antages! limited liability$ ma!imum continuity$ ability to raise large sums of capital$
economies of scale$ the ability to buy special e:uipment saves in labour and e!pense$ easier to
borrow money
"isad.antages! formation involves considerable documentation and e!pense$ too many rules$
annual accounts are open to public inspection
Special business relationships
F#anc*ising
7n franchising% a company allows someone to buy the right to use their products or techni:ues
under their trade names. 7t offers a ready-made business opportunity for those who gave the
capital and are willing to work hard. 7t also provides an e!tensive marketing background.
o0ope#ati.es
8mall units of agriculture or manufacturing owned by people usually its workers" with small
and limited amounts of capital combine together for the purpose of sharing labour and buying
or hiring e:uipment% en.oying economies of scale and buying in bulk.
/olding companies
Cusinesses form a temporary or permanent combination to achieve a certain aim% for e!ample
in order to bring together several separate processes into one production unit. ,ach member
company retains its legal entity. A holding company can have subsidiaries affiliates".
&1
www.kozgazwarez.hu
%(ilding societies
'hey operate on a non-profit-making basis. 'hey are concerned with personal rather than
business matters.
P&%1I ENTE$P$ISE
%unicipal undertakings
Cusinesses or services operated on a commercial basis by local authorities. 'hey are financed
by local rates and charges made for the use of the service. 8ometimes they are subsidised by
grants from central government. sport centres% theatres% museums and so on"
State undertakings
Cusinesses that are operated by the government on behalf of the public. 'hey provide
commercial or industrial functions% often in a monopolistic position. ,ach corporation has a
legal identity separate from the government. A public corporation is owned by all the public.
Reneral overall policy is decided by the government in consultation with the corporation
board% which is selected by the government.
P#ofits a#e (sed in t*#ee )a-s!
'o pay interest on capital borrowed
8et aside for future repayment of loans
#einvested to improve or e!pand the industry
1osses must be met by the 'reasury% which in effect means the ta!payer.
Nationalisation and p#i.atisation
When a corporation% which is in private ownership% has been taken into state ownership% this
process is called nationalisation. 7n these cases the original owners are paid compensation.
When a publicly owned business is sold back to the private sector it is said to have been
p#i.atised. 'he possible reasons of privatisation can be raising revenue for the government or
increased choice and improved :uality for customers.
=easons for public ownership
'o take monopoly out of private ownership
'o keep a natural monopoly in public ownership
When the initial capital cost is too high for private enterprise
7n cases of essential but uneconomic forms of enterprise
'o protect national security e.g. atomic energy"
'o standardise e:uipment and avoid duplication of services
&&
www.kozgazwarez.hu
'o save an ailing industry and protect .obs
Advantages of public ownership
Rovernment has the resources to fund a vast industry
Will ensure provision of essential services
#educes possible duplication of e:uipment
,nables large sections of the economy to be planned
6rofits benefit the whole nation
,n.oys ma!imum economies of scale because of large size
6ersonnel are appointed and promoted because of proven ability
)isadvantages of public ownership
*an be over-cautious because they are answerable to the public
Cosses are politicians and may not have the necessary skills
Gocal issues may be disregarded in favour of policies of
national importance
8tate monopoly can lead to inefficiency and insufficient profit
motive
Gosses have to be met by ta!payer
Additional expressions
ompan- -="% co#po#ation -8"@ Arganisation operating to make a profit.
Societ-! )riendly association of people.
5(ltinational! Arganisation operating in several countries.
Offs*o#e compan-! )irm based in a ta! haven to avoid higher ta!ation.
Fi#m! Any business organisation% or commercial house% whether it is a partnership or not%
often a company.
:OA%&1A$Y
'o owe sy sg tartozik vkinek vmivel
*ontent tartalom% tartozIk
'o e!pand bKvLt% szIlesLt vmit
>eed okirat
Audited accounts kJnyvvizsgHlat
7nspection megtekintIs% szemle% vizsgHlat
>etached kNlJnHllM
'o set aside fIlretesz vmit
Ailing beteg
?ast MriHsi% hatalmas
6roven ability bizonyLtott kIpessIg
Aver-cautious tPl Mvatos
&(
www.kozgazwarez.hu
?G.
:I. 5anagement and inte#nal o#ganisation of '(siness
5ANAGE5ENT
=esponsibilities of management
'he higher in the hierarchy a person is% the greater will be his responsibility. Banagers are
those who have the responsibility to direct, control and co-ordinate others. He is responsible
for the actions of his subordinates.
5ANAGE5ENT IS $ESPONSI%1E TO
!wners to achieve the best possible return on the capital invested in the business.
*lients to provide goods or services% of the specified terms.
Employees to provide the safest and most comfortable working conditions and to pay a
fair wage.
5ANAGE$S 5&ST O$GANISE T/E 7O$2 OF OT/E$S %Y
Appointing and training new staff
*ommunicate company policy
Rive instructions and set tasks
Assess performance
>iscipline and dismiss staff
6unctions of management
?. Planning! Baking decisions% policy formation and choosing the methods to achieve
the ob.ectives
@. o0o#dinating! >irecting and integrating the activities
A. 5oti.ating! ,ncouraging other members of the organisation to carry out their tasks
properly and effectively
B. ont#olling! 8upervising and checking the activities
Span of control
7t refers to the number of subordinates a manger supervises. Infl(encing facto#s on t*e span
of cont#ol a#e!
'he comple!ity of the work
8elf-discipline of workers
Bethod of communication
)re:uency of supervising
*apability of the manager
<eadership
T-pes of g#o(ps
?. Info#mal g#o(ps! 'he members usually come together voluntary and the purpose of
the group is not rigidly defined% there are no set rules and the leader is decided by the
members.
@. Fo#mal g#o(ps! 'hese are usually created for a specific purpose% such as a
department in a firm. 'hey have a formal structure and an appointed leader.
&/
www.kozgazwarez.hu
O'Hecti.e
A formal group needs a clearly defined ob.ective% e.g. to produce a certain product.
Indi.id(alit-
,ven though they are part of a group each person still ahs to work as an individual. 'here can
be a problem if the individual+s views or attitudes are not in harmony with the rest of the
group.
T*e leade#
'he leader appointed has the power to regulate the group behaviour. He tries to identify
parameters within which the group can operate. %otivating employees by wages% working
conditions is a ma.or function of management. 'he success of management depends upon the
ability to lead. Banagers must be inspired to have interest in the operation of the firm" in
order to be able to inspire others.
1eade#s*ip st-les
A(toc#atic! 'he leader takes decisions and e!pects others to carry these decisions out
without :uestion.
Pe#s(asi.e! 'he leader takes the lead in taking decisions but spends time persuading
others that these decisions are correct.
ons(ltati.e! 'he views of the group are taken into account before decisions are made%
although the leader has the final say in the decision.
"emoc#atic! 'he leader allows a decision to emerge through group discussions.
*ommunication
6eople are more committed to involvement in an organisation when they are well-informed of
policies% and even more so when they have participated in making decisions. *ommunication
is a valuable tool for involving all members of an organisation in its activities. ,ffective
management communications re:uire a t)o0)a- flo) of info#mation!
)ownward communication 7t is initiated by management and is used to inform employees of
company policies% proposals and decisions. T*e t)o main met*ods of it a#e!
O#al! direct command% meetings% loudspeakers% closed circuit television% telephone
7#itten! memoranda% notice boards% reports% company .ournal% letters
>pward communication 7t is initiated by employees. 7t feeds back to management the views%
suggestions% proposals% reactions and difficulties of employees. Its t)o met*ods a#e!
"i#ect! managers talking to employees and elected representatives
Indi#ect! suggestion schemes% attitude surveys
&0
www.kozgazwarez.hu
INTE$NA1 O$GANISATION OF %&SINESS
'usiness functions
T*e main aim of an- '(siness is to ma!imise profits in order to give the best possible return
to the owners for the money they have invested in the company. 'hey achieve this aim
through the functions of production and marketing.
P#od(ction
'he main function of production is to satisfy human wants. 'his also refers to commercial
producers% not only to industrial producers. 'he term production also includes those members
of the community% who increase the efficiency of production% such as bankers% transporters%
insurers% doctors% teachers% etc.
5a#keting
'he marketing function of business aims to anticipate consumer demand in order that the right
products are manufactured. Barketing promotes sales to the consumer.
Emplo-ment
A further function of business is the provision of employment. 'he more businesses that e!ist%
and the more successful they are% the greater the number of personnel needed% although
technological developments cause a reduction in the number of employees needed% and many
of the traditional areas of employment have been transformed. ;owadays there is a growing
demand for the production of consumer goods% and a growth in the service industries% which
results a rising need in the number of employees.
7nternal structure
'he internal structure of a business is influenced by its size. 'he small business is organised
fairly simply% while the larger company has a more comple! structure and more divisions.
Small fi#ms
'hey employ fewer people% therefore they cannot easily be organised into separate units or
departments. 'he workers tend to be less specialised and need to have a wider range of skills.
'hey are re:uired to carry out a wider variety of tasks therefore work in a small firm is more
interesting and satisfying.
1a#ge o#ganisations
'hese are generally private or public companies owned by shareholders and governed by a
board of directors elected by the shareholders. 'he board appoints a managing director to
oversee the day-to-day running of the business and to ensure that policies formulated by the
board are carried out effectively. A company secretary is also appointed to deal with legal
matters.
&1
www.kozgazwarez.hu
"epa#tmental o#ganisation
Garge firms are able to divide their organisations into separate specialist departments. 'he
number and type of departments vary depending on the type of firm. T*e main t-pes a#e!
Acco(nts payments% invoices% money flow% wagesF"
Sales plan and organise selling$ sales representativesF"
Ad.e#tising encourage custom$ advertising agencyF"
Administ#ation co-ordinating the activities% centralised filing% typing pool% mail roomF"
Pe#sonnel finding and dismissing employees% resignations% training% welfare of persons.."
P#od(ction co-ordinate production$ progress chasers% :uality controllersF"
T#anspo#t firm+s own fleet of vehicles% organise transportF"
P(#c*asing bought items% orders% :uotations% terms of purchaseF"
1egal contracts% guarantees% insurance% compensation$ company secretaryF"
'usiness growth
Bost of the firms try to increase in size. 7t may be achieved through internal growth% but also
by combining with other firms to form a larger organisation.
5e#ge#s
Bergers or amalgamations occur when two or more firms combine to operate under a single
name and control. 'he most common way of forming a merger is when a company absorbs
the other by a 9take$over8 bid. 7n order to obtain control of another company% the firm may
buy up the voting shares of the company on the open market. When two or more companies
merge integration is said to have taken place.
T*e t*#ee fo#ms of integ#ation o# me#ge# a#e
?. :e#tical integ#ation! 7t occurs when a firm merges with another at a later stage of
production forward integration" or merges with another at an earlier stage of
production backward integration".
@. /o#izontal integ#ation! 7t is a merger between two firms at the same stage of
production in order to increase their share of the market.
A. onglome#ate me#ge#! When a firm amalgamates with another company that has no
link with its e!isting activities. ,.g. a car manufacturer and a chain of clothes shops.
5(ltinationals
*ompanies sited in different countries may combine to form a multinational company. 7t can
also be formed by a parent company e!panding into other countries and setting up subsidiary
companies.
5onopol-
7t arises when a firm has so much control over the supply of a commodity or service% that it is
able to also control the price. 8uch a situation is beneficial to the firm% but not to the
consumer.
&2
www.kozgazwarez.hu
a#tel
7t is a group of separate businesses% which have agreed to co-operate in order to control
competition% to establish prices and market :uotas and divisions of territory. A cartel can also
be formed by a group of countries with the aim of regulating production and price% e.g. A6,*.
:OA%&1A$Y
'o assess performance elKirHnyozni a tel.esLtmInyt
'o discipline sy fegyelmezni vkit
'o dismiss sy elbocsHtani vkit
7ntention szHndIk
8pan hatMkJr
'o emerge felmerNl% kikerNl% lItre.Jn
*ommitted elkJtelezett
7nitiated kezdemInyezve
*ommand utasLtHs
8urvey vizsgHlat
'o anticipate sg elKre.elezni% meg.Msolni vmit
'o oversee sg felNgyel% irHnyLt% ellenKriz vmit
)leet of vehicles .HrmSHllomHny
#esignation lemondHs
6rogress chaser mSvezetK% termelIsirHnyLtM O"
Berger egyesNlIs% fPziM
'o absorb sg elnyel vmit
*onglomerate tJmJrNlIs
'o amalgamate with sg egybeolvad vmivel
??.
&3
www.kozgazwarez.hu
:II. %(siness finance> T-pes and so(#ces of capital
%&SINESS FINANE CFINANIA1 "O&5ENTSD
There are three main financial documents
1. Calance sheet
&. 6rofit and loss account
(. *ash flow forecast or statement
%A1ANE S/EET
'he primary aim of a business is to make a profit for its owners or shareholders. 'heir
success depends upon how efficiently the capital or assets are employed. A potential borrower
is re:uested by the bank to provide audited financial statements covering the previous three
years in order to evaluate the applicant+s financial position.
A 'alance s*eet provides a basis for understanding the financial position of a firm. 7t is a
statement of what an enterprise owes and what it owns at a particular date. 'he things a
company owns are called its assets and the various sums of money that it owes are called its
liabilities. 7t shows where the capital used in a business has come from% and what it has been
spent on. 'he assets and liabilities stand in two lists. 'he assets are placed in order of
liquidity$ the most li:uid stands at the bottom.
Simplified 'alance s*eet!
Asset s Lia bil it ies
Fixed assets Share capital
Land Ordinary shares
Building Preference shares
Plant and machinery Long-term liabilities
Current assets Mortgage
Stocks Reserves
Debtors Loan capital
Cash Debenture shares
Bank balance Loan
Net current assets Current liabilities
Tax to be paid
Bank oerdraft
Creditors
Profit
T/E P$OFIT AN" 1OSS AO&NT
7t is also called the working account. 7t records the revenue and the e!penses of a company
over a given financial period. 7ncome < *ost of sales Rross profit < ,!penses ;et profit"
T/E AS/ F1O7 FO$EAST
'he flow of money in and out of a business is called cash flow. 7t is the difference between
the receipts from sales and the amount spent on e!penses. A trading surplus adds to the
reserves while a deficit reduces reserves. A cash flow forecast shows how much cash the
company is going to make and to need in the future. 7t is an essential document when
e!amining the solvency of a company.
&4
www.kozgazwarez.hu
SO&$ES OF APITA1
,very type of business organisation needs money. Boney% which is used for buildings and
machines% is called capital. 7t is a man-made resource% the factor of production% which is used
to make further production possible. Cusinesses need capital to start% to continue trading and
to e!pand. 'he sources of capital tell us where the capital comes from.
T/E SO&$ES OF APITA1 A$E
?. S*a#e capital Ce;(it-D! Boney given to the company by shareholders in return for a
share of the company+s profits not fi!ed dividend". 'his refers to ordinary shares.
8hare capital is not repayable$ shareholders can get cash for his shares only by selling
them. Preference shares usually carry a fi!ed dividend and are paid out of profits
first. 'his type of share is not risky% as the dividend is paid even when profits are low.
@. 1oan capital! A company can raise capital from other sources by issuing debentures
or getting loans. )ebenture holders earn a fi!ed rate of interest% which is paid even if
the company makes no profit. >ebentures are loans to a company and debenture
holders are creditors. 'hus the company must repay their money. *ompanies can use
the services of banks in order to raise e!tra capital. Averdrafts are very common.
Canks also lend for short-% medium- and long-term periods if companies provide
security collateral".
A. $ese#.es! 'hese are retained earnings% undistributed profits or reinvestment. 'his
means a percentage of gross profits ploughed back into business.
TYPES OF APITA1
*apital can be usefully divided into groups and used in calculations as a means of analysis%
and further interpretation of the balance sheet.
)i!ed capital U Working capital T ,mployed capital
,mployed capital
VV
*urrent liabilities T *apital owned
Working capital
VV
*urrent liabilities T ;et working capital
FI3E" APITA1 8 ASSETS
)urable "long$term# assets of a business% which are used over a long period of time% and are
tied up in permanent use. 'hey are not consumed in the process of production% but firms have
to replace them when they are too old. ,!amples are@ land% building% furniture% machinery%
vehiclesF
7O$2ING APITA1
7t is also called as current assets or circulating capital. 7t is a sort of capital% which is
continually changing in quantity/ total value or nature$ and which is used for further
production. ,!amples are@ stocks of raw materials% partly finished and finished goods% which
are used for further production$ cash% bank balanceF
(5
www.kozgazwarez.hu
E5P1OYE" APITA1
'his is obtained by adding together the fi!ed and current assets of the firm. 7t is the total of all
the assets being used by the business.
&$$ENT 1IA%I1ITIES
>ebts% which will have to be repaid in the near future. 'hese can be bank overdrafts% debts
owed to suppliers and ta!es payable to the government.
APITA1 O7NE"
;et value of the assets owned by a business. 7t is employed capital minus current liabilities.
1I<&I" APITA1
'hat part of the current assets% which are cash or are easily changeable into cash without
delay% for e!ample% bank balance% cash in tills and debts owed by others debtors".
NET 7O$2ING APITA1
*urrent assets minus the current liabilities. 7t is particularly important because it takes into
account the possibility of all the creditors to the business calling for payment.
T&$NO:E$
'his refers to the gross income or sales of an organisation over the previous year. 7t can
indicate how active the firm has been in a given period.
Net t(#no.e#! 'his is calculated by taking the total sales of the business minus the value
of goods returned or credit notes issued.
$ate of t(#no.e#! 7t is the number of times the average stock of a business has been sold
in the year. 7t indicates how busy the firm is.
P$OFIT
7t is the reward the business-person receives for taking the risk involved in business.
G#oss p#ofit! 7t is the net sales minus the cost of the goods sold.
Net p#ofit! 'his is the rest of gross profit after allowing for e!penses of carrying on the
business such as wages% rent% rates% advertising and bills of all kinds. ;et profit T Rross
profit < ,!penses"
T/E A&SES AN" EFFETS OF INF1ATION
Inflation is a rise in the general price level of goods and services over a long period of time.
7ndividual price increases are not classified as inflation.
A&SES OF INF1ATION CTYPESD
?. "emand0p(ll inflation! 'he demand for goods and services e!ceeds the supply
available% because there is a large supply of money available. #elatively high
disposable incomes% credit is easily available or government spending is relatively
high"
@. ost0p(s* inflation! 7t occurs when production costs are rising. #aw materials%
energy and wages"
(1
www.kozgazwarez.hu
'hese two causes of inflation are often interrelated so that the one situation leads to the other%
which in turn leads to a recurrence of the first situation. 'his chain of cause and effect is
called an inflationary spiral.
A. Go.e#nment polic-! Rovernments can affect the level of prices by controlling or
regulating them% or by reducing ta!es on goods and services keeping prices down". 7f
a government doesn+t regulate prices or if it imposes higher ta!es% it may push prices
up.
T/E ONSE<&ENES OF INF1ATION
Genders of money banks" are less )illing to lend or are willing to lend only at higher
interest rates because the real value of money tends to decline. 'his makes borrowing
more e!pensive% and it may causes prices to rise even further.
'here are many groups of people% whose incomes a#e fi,ed. 7n a period of inflation the
living standards of these people fall and they suffer hardship. old age pensioners"
When people see the value of money being eroded% they are less )illing to sa.e.
'herefore there is less money available for investment.
'he p#ices of *ome0p#od(ced goods become more e,pensi.e than those produced
abroad% so they become difficult to e!port% and the balance of payments is affected.
:OA%&1A$Y
'o evaluate sg IrtIkel% megbecsNl vmit
*urrent liabilities folyM tartozHsok
*urrent assets forgMeszkJzJk
)i!ed assets HllMeszkJzJk
7nventories T stocks kIszletek
Cank overdraft folyMszHmla hitel
)orecast elKre.elzIs% prognMzis
'o plough back sg into swhere reinvesztHl vmit vmibe
'o be tied up in sg lekJtve% befektetve vmibe
'ill kassza% pInztHr
'o indicate sg .elez% mutat vmit
'o e!ceed sg felNlmPl% meghalad vmit
'o be interrelated kJlcsJnhatHsban vannak
#ecurrence of sg vmi kiP.ulHsa% ismItlKdIse
Hardship nIlkNlJzIs% nehIzsIg
?+.
(&
www.kozgazwarez.hu
:III. T*e '(siness t#ansaction! En;(i#ies9 Offe#s9 O#de#s
En;(i#ies
A great number of business transactions start with an en:uiry% which often opens a
new connection. 7f you look for your source of supply% or if you don+t know e!actly at
what price or on what terms you can obtain the goods% you send out an en:uiry to one
or more possible suppliers.
FO$5A1ITIES
8uch an en:uiry can be written. Bost of them are short and simple% many firms send
printed en:uiry forms. As a prospective buyer% the writer states briefly and clearly
what he is interested in. 7t is necessary to be a little more e!plicit.
Asking for concession
When you are asking for concession% your en:uiry is to obtain a special price or
discount or advantageous terms for regular orders. 7n these cases you have to sell your
proposal to the supplier% so the letter must be attractive to the supplier.
6irst enquiry 'his is a special type of en:uiry% a letter sent to a supplier with whom you
have not previously done business.
7t should include
1. T*e so(#ce@ 'his is a brief mention of how you obtained your possible supplier+s
name. embassy% consulate% chamber of commerce% e!hibition% trade fair%
recommendation from a business associate% advertisement"
&. 8ome indication of t*e demand in -o(# a#ea fo# t*e goods that the supplier deals in.
(. "etails of )*at -o( )o(ld like your prospective supplier to send -o(. You will be
interested in a catalogue% a price list% discounts% methods of payment% delivery terms%
and samples.
/. Additional demands% even if conditions are :uoted.
0. A closing sentence to round off the en:uiry.
7t is not advisable to commit yourself in an en:uiry because there are so many uncertain
factors in the market.
((
www.kozgazwarez.hu
OFFE$S
'here are two kinds of offers@
1. &nsolicited offe# 8 Sales lette#@ 'hese are written on the seller+s own initiative. You
may want to introduce a new article% to promote sales% reduce your stocks or offer your
customer a line. 'he sales letter is nothing but advertising aimed at a carefully selected
group. 7t re:uires great skill to interest a customer in an article for which he has not
asked. You must try to
a" Att#act the reader+s attention% e!cite his curiosity and so induce him to read
further.
b" 5ake *im desi#e to have the product or service that you are offering.
c" on.ince *im that your offer has special features% and that it is in his interest
to accept it.
d" Bake him take action.
?ou can use
8tamped and addressed envelopes
Cusiness reply letters
6re-paid postcards so that it doesn+t cost him anything
&. $epl- to an en;(i#-@ 7n this letter you can encourage or
persuade your prospective customer to do business with you. A simple answer is
not enough.
You can mention some selling points of your product including any guarantees you
offer.
7f you don+t have what the en:uirer has asked for% you can offer an alternative
substitute" to him.
You should enclose current catalogues% price lists and samples if necessary.
7f you may not be able to handle the order or answer the en:uiry% you should tell
him and if possible refer him elsewhere.
7n reply to an en:uiry% you may want to give your prospective customer a
:uotation.
A quotation should contain
Euantity
Euality
6rice
Bethod of transport
'erms of delivery stating
'erms of payment
7nsurance
?alidity of the offer
(/
www.kozgazwarez.hu
Arbitration clause
Special offers
An offe# can be made )it*o(t engagement% when the seller reserves the rights to change the
conditions of the offer.
7f the company makes a fi#m offe#% it means they will hold the goods for a certain time until
you order% e.g. firm for 1/ days.
A tende# is a firm offer to a governmental department or to a local authority% to e!ecute
e!actly specified work or to supply goods re:uired% at a fi!ed price. 7nvitations for tenders are
often issued by advertisement or by circulars to 'rade Associations.
"isco(nts
Trade discount to sellers in similar trades
@uantity discount for orders over a certain amount
*ash discount if payment is made within a certain time
O$"E$S
When the buyer agrees all the conditions of the offer he o#de#s the goods.
He can as well make a co(nte#0offe# counter-proposal" if he+d like to change some
conditions of the offer.
He might as well #ef(se re.ect% turn down% decline" it if the offer doesn+t meet his
re:uirements.
When all the points of the offer have been cleared up and the terms have been found
acceptable to both the seller and the buyer an order is placed.
7t should be $ accurate
- clear
7t should contain
1. Euality description of the goods"
&. Euantity in customary units"
(. Alternative alternative goods acceptable if e!act goods re:uired are not available"
/. >ocuments all documents re:uired% such as CDG% *ommercial 7nvoices% *onsular
7nvoices% 7nsurance 6olicy% *ertificate of Arigin etc."
0. 6acking and marking
1. 8hipping and forwarding
2. 'erms of payment and delivery
(0
www.kozgazwarez.hu
6ormalities Arders are usually written on a company+s official order form order sheet". A
covering letter is also sent.
As soon as a supplier receives an order% it should 'e ackno)ledged Cconfi#medD. 7t concludes
the contract then% so the acknowledgement of the order *as legal significance.
When the supplier has made up the order and arranged shipment% the customer is informed of
this in an ad.ice CAd.ice Note9 Ad.ice of "ispatc*D.
With their first order% new customers as a rule give #efe#ences@ - business referee
- banker as a reference
:OA%&1A$Y
,!plicit < szabatos% vilHgos% pontos
*oncession < engedmIny
'o make a concession < engedmInyt tenni
'o sell one+s proposal < eladni% elfogadtatni vki .avaslatHt
7ndication of the demand for sg. < a vmire von.M kereslet .elzIse% tudatHsa
Euoted conditions < kikJtJtt feltItelek
'o round off the en:uiry < lezHrni% befe.ezni az a.HnlatkIrK levelet
'o commit oneself < elkJtelezni magHt% HllHst foglalni
-nsolicited offer < kIrIs nIlkNli a.Hnlat
An the seller+s own initiative < az eladM sa.Ht kezdemInyezIsIre
'o promote sales < JsztJnJzni az eladHst
Advertising aimed at so. < vkit megcIlzM hirdetIs
'o attract one+s attention < felkelteni vki figyelmIt
'o e!cite one+s curiosity < felkelteni vki kLvHncsisHgHt
'o induce sy to do sg. < vkit arra kIsztet% hogy megtegyen vmit
'o convince sy T to persuade sy to do sg D that < rHbeszIlni% meggyKzni vkit vmirKl
)eature < tula.donsHg
'o take action < cselekedni
8elling point < IrtIkesLtIsi hely
'o handle the order < tel.esLteni a rendelIst
'o refer sy elsewhere < mHshovH irHnyLtani vkit
Arbitration clause < bLrMi% .ogi zHradIk O"
Affer without engagement < kJtelezettsIgvHllalHs nIlkNli a.Hnlat
'o reserve the rights to do sg < fenntart.a a .ogot% hogy megtegyen vmit
)irm offer < kJtelezK a.Hnlat
Authority < hatMsHg% szerv
'o e!ecute specified work < meghatHrozott feladatot elvIgezni
'o be issued by an advertisement < hirdetIsben kJzzItIve
*ircular < kJrlevIl
'rade discount < hSsIgrabatt
Euantity discount < mennyisIgi rabatt
*ash discount < skontM
'o be cleared up < tisztHzva van
*ustomary < szokHsos
(1
www.kozgazwarez.hu
CDG < tengeri ha.Mrak.egy
*onsular 7nvoice < konzuli szHmla
7nsurance 6olicy < biztosLtHsi kJtvIny
8hipping and forwarding < szHllLtmHnyozHs O"
'o be acknowledged T confirmed < elismerve% visszaigazolva% megerKsLtve
'o conclude sg < eredmInyezni% .elenteni vmit
'o have legal significance < .ogerKre lIpni
'o make up the order < JsszeHllLtani a rendelIst
Advice < IrtesLtIs
>ispatch < feladHs% IrtesLtIs
?I.
I3. 5et*ods of Pa-ment
1ETTE$ OF $E"IT9 %I11 OF E3/ANGE9 "O&5ENTA$Y O11ETION9
/E<&ES
'anking accounts
Opening a 'ank acco(nt involves paying money into a bank. 7f you have an account% you
can use a che:ue to buy goods% collect cash% pay bills and transfer money.
There are two main types of bank account
1. A c(##ent acco(nt che:ue account" allows you to use a che:uebook% but your money
does not earn interest. 7t is a convenient and safe method of handling money. Your
salary can go straight into your current account% and you can arrange 'anke#6s
t#ansfe#s. You get a #eg(la# statement from your bank% showing debit and credit
entries and the balance$ therefore you know where your money goes and where it
comes from.
&. A deposit acco(nt earns interest% but it does not allow you to use a che:uebook. 'he
rate of interest fluctuates. You can withdraw money from a deposit account by giving
notice to a bank.
/E<&ES
*e;(es are a substitute for money and they are easy% safe and convenient to use. 7t is the
owner+s direction to a bank to pay a stated sum of money to a named person or company% or
to his order% or to bearer.
Parties to a cheque
"#a)e# account holder"@ He or she draws the che:ue.
Pa-ee@ He or she is the person to whom the che:ue is payable.
"#a)ee@ 7t is the bank% which pays.
'he che:ue is only .alid if it is dated and the drawer+s signature is in the bottom right-hand
corner.
(2
www.kozgazwarez.hu
)ifferent types of cheques
1. Open c*e;(es not crossed"@ 'he payee could take it to *ity Cranch and obtain cash%
but anyone else might also be able to cash it. 7t concludes the payee+s name."
&. #ossed c*e;(es@ 'hey have two parallel lines drawn vertically across them and are
safer than open che:ues because they can only be paid through somebody+s bank
account. 'hey can+t be e!changed for cash over a bank counter.
(. Gene#al c#ossing@ Wand *ompanyX or WY*o.X is written between the lines. 'hus the
che:ue can be paid only to a bank.
/. Special c#ossing@ 7f the name of the bank is written between the lines the che:ue can
be paid only to the named bank.
0. %ea#e# c*e;(e@ 7t may be paid by the bank to anyone who is in possession of the
che:ue and who presents it for payment. 7t doesn+t conclude any payee+s name."
1. O#de# c*e;(e@ 7t is payable to a named person or order% so the owner of the che:ue
directs his bank to pay the amount of the che:ue to the named person or to his order.
2. Stale c*e;(e@ 7t is one% which hasn+t been presented for payment within si! months of
the date when it was drawn. 8uch a che:ue is not honoured by banks.
If t*e acco(nt *olde# )ants to )it*d#a) mone- from the bank he writes *A8H or 8,G) on
the line after 96ay+ and signs the che:ue.
A che:ue is a negotiable instrument of payment. 7t can be transferred from person to person
before it is actually paid by the bank% either by hading it over as with a bearer che:ue% or by
endorsement signing it on the back" as with an order che:ue.
'he endorsement consists of the signature of the person to whom the che:ue is payable on the
back of the che:ue.
1. %lank Cgene#alD endo#sement on a che:ue is an endorsement% which does not state
that it must be paid to% or to the order of any named party. 7t will therefore be paid to
the person who presents it. 'he endorser simply signs his name on the back of the
che:ue.
&. Special Cf(llD endo#sement on a che:ue is one which states the name of the person
endorsee" to whom% or to whose order% the che:ue is payable. W6ay 'homas 8mith or
order.X
(. $est#icti.e endo#sement on a che:ue is one% which forbids further negotiation of the
che:ue. W6ay 'homas 8mith only.X
%I11S OF E3/ANGE
'he 'ill of e,c*ange draft" is an unconditional order in writing% addressed by one person
drawer% creditor" to another drawee% debtor"% signed by the person giving it drawer"%
re:uiring the person to whom it is addressed drawee" to pay on demand% or at a fi!ed or
determinable future time% a certain amount to or to the order of a specified person payee"% or
to bearer.
(3
www.kozgazwarez.hu
P#omisso#- note! 'his is a special type of bill of e!change. 'he drawer and the drawee are
the same. 'his is a promise to pay a certain amount to the payee.
'he bill of e!change is (sed when the seller needs to allow some time for the buyer to arrange
payment. 'his is a fo#m of c#edit. 'he seller writes a draft to the buyer telling him to pay a
certain amount of money to a third party.
"#a)e#! 'he seller e!porter" is the drawer of the draft. He orders the drawee to pay.
"#a)ee! 'his is the buyer importer". He has to pay the amount.
Pa-ee! 'his is the third party to whom the draft should be paid.
'he drawees agree to pay the draft at the time when it becomes d(e% that is say% 15 days after
sight and the draft has to be accepted by being signed by the drawee or his bank.
'here are usually three copies of the bill of e!change$ the first one is the 9Fi#st of E,c*ange+.
7f this bill is accepted then the other copies% the second and the third of the same tenor are
invalid. Teno#! 'his is the length of time for a bill of e!change to reach maturity% i.e. to
become due for payment."
)iscounting
'he buyer or his bank accepts t*e 'ill by writing a signature across it% and then either
returning it to the drawer or seller" or his bank. 'he drawer can then *old it (ntil it mat(#es%
or he can *a.e it disco(nted by his bank% if he wants the money sooner. 7n this case the bank
will pay the amount on the bill% less a discount. 'he bank will then at the end of the period
collect the full amount from the buyer. 'he drawer can have the bill discounted at the current
rate of discount. 'he disco(nt depends on the rate of discount% and the length of time the bill
of e!change has to go before maturity.
Aegotiation
'he bill of e!change is a negotiable document% as the ownership of the amount can be
transferred to another person or company '- deli.e#- o# endo#sement of the document.
T/E "O&5ENTA$Y 1ETTE$ OF $E"IT
7t is a reliable and safe method of payment% and it protects the seller as well as the buyer. 7t is
an (nde#taking gi.en '- a 'ank at t*e #e;(est of a c(stome# to pa- a particular amount in
an agreed currency to a 'eneficia#- on condition t*at the beneficiary p#esents stipulated
doc(ments within a prescribed time limit.
(4
www.kozgazwarez.hu
,ow does a <(* workB
1. T*e '(-e# Cimpo#te#D asks *is 'ank to iss(e o# open a 18 in favour of the seller for the
amount of the purchase. 'here is usually a special application form% which the buyer fills in and
sends to his bank. 7t states all the main points of the parties and the action.
&. T*e impo#te#6s 'ank )ill t*en select a 'ank in t*e e,po#te#6s co(nt#- to act as its agent%
and will notify them that the credit has been opened.
(. T*e agent 'ank )ill notif- t*e e,po#te# t*at a c#edit *as 'een opened% and they may add
t*ei# o)n confi#mation by promising to see that the conditions of payment against the
documents will be fulfilled. 7f they confirm the letter% the GD* is a confirmed credit.
/. T*e '(-e# Ce,po#te#D s*ips t*e goods before the credit e!pires and sends t*e s*ipping
doc(ments to t*e agent 'ank that checks the documents against the conditions and pays him.
0. T*e agent 'ank )ill then send t*e doc(ments and de'it t*e impo#te#6s 'ank with the cost
and charges.
1. T*e impo#te#6s 'ank then c*ecks t*e doc(ments9 pa-s the agent bank and sends t*e
doc(ments to t*e impo#te# so that he can claim the goods.
Types of the <etter of *redit
1. I##e.oca'le! 'he buyer cannot cancel the credit.
&. onfi#med! A bank in the seller+s country pays the credit.
(. Sig*t o# st#aig*t c#edit! 7mmediate payment of the full amount on presentation of the
documents. *ash payment"
/. Acceptance c#edit! 6ayment of the full amount at maturity. 'he contract specifies payment at
a future date with a bill of e!change. After presentation of the documents% the bill can be
discounted in order to obtain the credit amount less discount" immediately.
0. "efe##ed pa-ment c#edit! 6ayment of the full amount at maturity. 'he contract specifies
payment at a future date without a bill of e!change$ therefore there is no possibility of
discounting. 7t can be accepted as security for an advance.
1. $ed cla(se c#edit! -nder it the seller can obtain an advance from the correspondent bank% but
it is the issuing bank that assumes liability. 'his advance is intended to finance the
manufacture or purchase of the goods% which are going to be delivered under the documentary
credit.
2. $e.ol.ing c#edit! When the goods are to be delivered in part shipments instalments" at
specified intervals% payment can be made under a revolving credit% which covers the value of
each instalment as it is delivered. After the utilization of the first amount the ne!t portion
becomes automatically available.
3. Negotiation c#edit! or commercial letter of credit" 6ayment of the credit amount will be
made by any bank% not only by the advising bank. ;egotiation means the purchase and sale of
bills of e!change."
4. T#ansfe#a'le c#edit! 'he beneficiary may transfer his claim under that credit to a third party.
7f the credit is divisible and transferable% the amount can be paid to several beneficiaries.
15. %ack0to0'ack c#edit! 7t is used when a middleman wishes to transfer to a supplier his claim
under a documentary credit% which is not transferable. 'he middleman+s bank% accepting the
first credit issued in the middleman+s favour% opens a second credit in favour of the supplier.
/5
www.kozgazwarez.hu
"O&5ENTA$Y O11ETION C"8P O$ "8AD
7t is an operation in which a bank collects payment on behalf of the seller the principal" by
delivering documents to the buyer. 7t is only used if there is a relationship of trust between the
buyer and the seller. 7t is less secure for the seller than a documentary credit.
A )(P is a suitable method of payment if
'he buyer+s ability and readiness to pay are not in doubt.
'he political% economic and legal conditions in the importing country are stable.
'he importing country places no restrictions on imports or has issued all the necessary
authorizations.
The four parties to the operation
1. principal e!porter% seller"
&. remitting bank
(. presenting bank collecting bank"
/. drawee importer% buyer"
,ow does a )(P workB
1. 'he e!porter stip(lates t*e te#ms of pa-ment in his offer or ag#ees on t*em with the
buyer in the contract of sale.
&. After the signing of the contract of sale% t*e selle# dispatc*es t*e goods either direct
to the address of the buyer or to the collecting bank. He sends all the necessary
doc(ments to his own bank t*e #emitting 'ank" together with the collection order.
'he remitting bank then #emits t*e doc(ments% together with the necessary
instruction% to t*e collecting 'ank.
(. T*e p#esenting 'ank info#ms t*e '(-e# of the arrival of the documents and notifies
him of the terms of their release. T*e '(-e# makes pa-ment% or accepts the bill of
e!change% and in return #ecei.es t*e doc(ments. 'he presenting bank then t#ansfe#s
t*e collected amo(nt to the remitting bank% which credits it to the principal+s account.
:OA%&1A$Y
'o involve sg - magHban foglal vmit
'o earn interest - kamatozik
'o handle money - pInzt kezelni
#egular statement - rendszeres kimutatHs% egyenleg
'o debit sg - megterhelni
'o credit sg - .MvHLrni
>ebit D credit entry - megterhelIs D .MvHLrHs
Calance - egyenleg
>eposit account - lekJtJtt betItszHmla
'o fluctuate - ingadozik% vHltozik
'o withdraw money from a bank - kivenni pInzt egy bankbMl
'o deposit money with the bank - betenni pInzt a bankba
'o give notice to a bank - elismervInyt adni egy banknak
8ubstitute for sg - vmi helyettesLtK.e
Cearer - bemutatM szemIly
/1
www.kozgazwarez.hu
>rawer of a che:ue - csekk kiHllLtM.a
'o draw a che:ue - kiHllLtani egy csekket
6ayee of a che:ue - csekk kedvezmInyezett.e
>rawee of a che:ue - csekk intIzvInyezett.e fizetK bank"
Apen che:ue - nyitott kIzpInzes" csekk
*ity branch - bankfiMk
6arallel - pHrhuzamos
?ertically - HtlMsan
Cank counter - banki pInztHrablak"% pult
Cearer che:ue - bemutatMra szMlM csekk
'o be in possession of sy - vki tula.donHban% birtokHban lenni
Arder che:ue - rendeletre szMlM D forgathatM csekk
8tale che:ue - le.Hrt csekk
'he date when it was drawn - a kiHllLtHs nap.a
'o be honoured by banks - bevHltva bankokban
;egotiable instrument of payment - HtruhHzhatM fizetIsi eszkJz
'o hand sg over as with a bearer che:ue - HtruhHzni bemutatMra szMlM csekkInt
,ndorsement - forgatHs
Clank general" endorsement - Nres forgatHs
8pecial full" endorsement - tel.es forgatHs
#estrictive endorsement - korlHtozott forgatHs
,ndorser - forgatM% HtruhHzM
,ndorsee - forgatmHnyos akire HtruhHzzHk"
'o forbid sg - megtiltani vmit
-nconditional order - feltItel nIlkNli utasLtHs
'o re:uire sy to do sg - megkJveteli% elvHr.a vkitKl% hogy
megtegyen vmit
>eterminable future time - meghatHrozhatM .JvKbeni idKpont
6romissory note - sa.Ht vHltM
>rawer of a CDG creditor" - vHltM kibocsHtM% hitelezK
>rawee of a CDG debtor" - vHltM cLmzett.e% adMs
6ayee of a CDG - rendelvInyes% kedvezmInyezett
'enor - le.Hrat% az idKtartam% amLg le.Hr
Baturity - esedIkessIg% le.Hrat
>iscount - levonHs
-ndertaking - LgIret% kJtelezettsIgvHllalHs
Ceneficiary - kedvezmInyezett
8tipulated - meghatHrozott% kikJtJtt
Within a prescribed time limit - elKLrt hatHridKn belNl
7n favour of sy - vki .avHra
)ulfilled - tel.esLtett
'o e!pire - le.Hrni idK"
'he credit e!pires - le.Hr a hitel
7rrevocable - visszavonhatatlan
8ight or straight credit - bemutatMra szMlM akkreditLv
Acceptance credit - elfogadHsi akkreditLv
>eferred payment credit - halasztott fizetIsS akkreditLv
8ecurity for an advance - fedezet egy kJlcsJnre
Advance - kJlcsJn
7ssuing bank - kibocsHtM% forgalomba hozM bank
/&
www.kozgazwarez.hu
'o assume liability - HtvHllalni a tartozHst
'o be intended to do sg - vmi cIl.HbMl van arra a cIlra% hogyF"
#evolving credit - feltJltKdK akkreditLv
At specified intervals - meghatHrozott idKkJzJnkInt
>ivisible - megoszthatM
>ocumentary collection - okmHnyos beszedvIny% inkasszM
An behalf of sy - vki nevIben
6rincipal - megbLzM
Gegal conditions - .ogi feltItelek
'o issue the necessary authorizations - megadni a szNksIges engedIlyeket
#emitting bank - kNldK bank
'o remit sg - kNldeni vmit
>rawee of a >D6 - intIzvInyezett K fizet"
'o stipulate sg - kikJt% meghatHroz vmit
'he terms of sg+s release - vmi HtruhHzHsHnak feltItelei
?=.
3. (stoms P#oced(#es
Rovernments can control foreign trade in order to encourage e!port and restrict import. 'hey
can reach this aim@
"i#ectl- by administrative measures strict licence system"
Indi#ectl- by foreign exchange regulations
o >evaluation of the local currency
o 8ubsidize prices
o ,!tend credits
Polic- of c(stoms d(ties
TYPES OF &STO5S "&TIES
1. E,po#t d(t- rarity"
&. Impo#t d(t-! A certain type of ta! imposed on imported goods to raise the price of
foreign goods% and thus% to protect the home market.
(. T#ansit d(t-! 7t is levied on goods passing through a customs area.
The double aim of tariffs
'ariffs can be protective their aim is to protect domestic production from foreign
competition" or revenue tariffs they obtain revenue for the government".
%ethods of imposing tariffs
Specific duties are a set price for each item imported. 'hey are imposed according to the
weight of goods.
Ad valorem duties are calculated according to the value of the goods.
*ompound duties are a combination of the above ones.
/(
www.kozgazwarez.hu
*ustoms tariffs of a country can be
Single column tariffs 'hese are used when rates are valid for all countries.
)ouble column tariffs 'hese are applied when different rates are used because of the
preferential rates for certain countries.
T/E /&NGA$IAN &STO5S SYSTE5
7n 142( Hungary signed the RA''% and from that time% our country participates in RA''+s
trade negotiations. 'he !ustoms "ct is in force since 1
st
April 1441. 7n Hungary% only import
duties are used.
*ustoms territory
7t contains the #epublic of Hungary% the free trade 3ones bonded warehouses" and the transit
zones. Transit territory is an enclosed part of the customs territory$ it is assigned for waiting
transit passengers% storage of goods% mail consignments and luggage while in transit.
Transaction value
7t is the price% which is paid for the goods when sold for e!port to the importing country% this
is the customs value of imported goods. :al(e set '-
Assess
7dentical or similar goods
>eductive or computed value
&STO5S 1EA$ANE
Types of customs clearance
7& *learance for home use
Roods can remain permanently in the customs territory.
77& *ustoms transit
Roods are transported under control from one customs office to another. 'ypes of
customs transit@
Through transit from an office of entry to an office of e!it
7nward transit from an office of entry to an inland customs office
!utward transit from an inland customs office to an office of e!it
7nterior transit from an inland customs office to another inland customs
office
777& *ustoms warehousing
When the importer is not willing or able to pay at the arrival of the goods% the products
are placed in bonded warehouses by the customs until the duty is paid. While the
goods are in bond they can still be prepared for sale by the importer.
//
www.kozgazwarez.hu
7+& Temporary admission
*ertain goods can be bought into a customs territory relieved from payment of duties
and ta!es. 8uch goods must be imported for specific purposes and must be intended
for re$exportation within a specific period. Roods imported under international
agreements% in accordance with contracts of rent or lease% loan or leasing contracts%
fairs and e!hibitions."
Tempo#a#- admission fo# in)a#d p#ocessing! 8uch goods undergo
manufacturing% processing or repair before re-e!portation% and are relieved from
payment of import duties and ta!es. 'he form of processing performed inland is
referred to as active processing.
Tempo#a#- e,po#tation fo# o(t)a#d p#ocessing! Roods% which are in free
circulation home use" in a customs territory may be temporarily e!ported for
manufacturing% processing or repair abroad% and then re-imported with e!emption
from import duties. 'he processing effected abroad is called passive processing.
Payment
7mmediate
)eferred payment 'he customs debt is payable within 10 working days from the due
date."
7nstalment payment in cases of leasing interest-free"
)rawback procedure
When goods are e!ported% it provides for a total or partial refund to be made in respect of the
import duties and ta!es charged on the goods.
=elief from duty
*ustoms quota -p to different limits of value or :uantity% there is a preference applicable
to raw materials and spare parts% which are generally not available in the domestic market.
*ustoms waiver 'emporary easing of imports.
Authorisation procedure *ontrol about uses of raw materials or other goods% whether
they are used for a specific ob.ective.
Exemption from duty
lea#ance!
7tem by item internal and e!ternal e!amination
Simplified spot check or administrative
Exemption from customs duty refers only to e!emption from the payment of the duty % the
customs clearance fee and the statistical fee.
Exemption is granted to diplomats of foreign states% heads of state% heads of government%
churches% hospitals and so on.
/0
www.kozgazwarez.hu
:OA%&1A$Y
Beasure intIzkedIs
#evenue tariffs .JvedIki adMk
*ompound osszetett
'o assign sg for sg ki.elJl vmit vmire
Assess becslIs
7dentical azonos
>eductive levezethetK
*omputed szHmLtott
7nward belsK
Autward kNlsK
7nterior belfJldi
Cond vHmKrizet
Admission belIpIs
'o be relieved from sg felmentve vmi alMl
>rawback vHmvisszatIrLtIs
Wavier .ogfeladHs% mellKzIs
@G.
3I. Packing and 5a#king
PA2ING
'he p(#pose of packing is to protect from damage or loss goods in transit. 8uch #isks occ(#
at fi.e main points!
When the goods are being loaded.
When they are being handled.
>uring the voyage itself.
When they are being unloaded.
When they are being transported to their final destination.
'here are se.e#al c#ite#ia by which you may .udge which form of packing is most suitable@
'he method of transport used
'he nature of the goods
'he conditions% e.g. the climatic conditions or the local unloading conditions
'he regulations to be observed 'here are many regulations imposed on the materials
used for packing."
'here is wide variety of methods of packing% packing materials and containers. 'he packing
must be appropriate to the type of goods to be carried.
/1
www.kozgazwarez.hu
Some words used in packing
ontaine#s such as bag% container% bo!% sack% barrel% can% tinF
Packing te#ms such as waterproof% wrapping% sealed% padding% lining% rustproof%
airtightF
"imensions such as weight% bulk% mass% volume% spaceF
*ontainers are steel bo!es of different sizes% but they are the same width and height.
Packaging usually means the wrapping of products for display in shops. 'he term packing
refers to larger :uantities packed for transport.
%arking
To a.oid conf(sion9 dela- and misca##iage the individual packages must be clearly marked
and numbered.
All e,po#ts *a.e to 'e ma#ked in o#de# to
7dentify the goods
7dentify the customer
7dentify the destination of the goods
Rive instructions for handling
Bost customers overseas have their o)n ma#ks that they will ask the e!porter to use.
5a#ks (s(all- consist of
'he destination of the goods
'he buyer+s initials
'he buyer+s order number
'he number of consignment
'o overcome language problems various inte#nationall- accepted signs are used for
handling instructions% such as
A wine glass indicates which way up a case should be stood.
A broken glass indicates that the goods are fragile.
An umbrella mark means the cargo must be kept dryFetc.
/2
www.kozgazwarez.hu
:OA%&1A$Y
6urpose of sg - vmi szHndIka% cIl.a
'o occur at sg - vmi elKfordul% megtJrtInik vmilyen esetnIl
'o load - rakodni% berakodni
'o handle - kezelni vmit
'o .udge - megLtIlni vmit
'o be observed - amit figyelembe kell venni
#egulation imposed on sg - szabHly elKLrva vmire vonatkozMan
*ontainer - tartHly Hlt. is"
'o be appropriate to sg - megfelelK% alkalmas vmire
Carrel - hordM
Wrapping - csomagolHs% gJngyJleg
8ealed - lezHrt
6adding - bIlIs
Gining - szigetelIs
#ustproof - rozsdaHllM
Airtight - lIgmentesen zHrMdM
Culk - Jmlesztett
Bass - halom% rakHs% tJmeg
Beasurement - mIret
?olume - mennyisIg
8pace - tIr% kiter.edIs
'o display sg in shops - kitenni vmit Nzletekben
'o refer to sg - vmire utal% vonatkozik% hivatkozik
8teel - acIl
Width - szIlessIg
Biscarriage - elkallMdHs
7nitials - kezdKbetSk% monogram
*onsignment T cargo - szHllLtmHny% kNldemIny% rakomHny
'o overcome sg - legyKzni vmit
Handling instructions - kezelIsi elKLrHsok% utasLtHsok
'o indicate sg - .elezni% mutatni vmit
@?.
/3
www.kozgazwarez.hu
3II. Ins(#ance
7n business% insurance has great importance. 7t is an aid to trade$ businessmen can insure
themselves against loss or damage to their property.
7mporters and e!porters must insure their goods while in transit% their stocks and other
company property$ they must recompense their employees if they are in.ured while working
for them.
T/E P$INIP1ES OF INS&$ANE
1. Ins(#a'le inte#est@ 7t means that we must have a direct personal interest in the effect
of a loss against which we are insuring. 7t applies to every contract of insurance.
&. &tmost Good Fait*@ 7t means that the person wishing to be insured must be
absolutely open and honest in his dealings with the insurance company. 7t also applies
to every contract of insurance.
(. Indemnit-@ 7t means that a person suffering a loss after insuring against it will be
indemnified for the amount of the loss. He will be restored as nearly as possible to the
condition that he was in right before the loss occurred. Cut the insured is not allowed
to make a profit out of a loss. 7t applies to all contracts of insurance e!cept personal
accident and life insurance.
/. Appro!imate cause"
INS&$ANE PO1IY
'he written contract between the insurers and the insured is called the polic-.
7nsurance companies can only cover you against those #isks whose statistical probability can
be calculated with a high degree of certainty.
Ins(#a'le #isks incl(de s(c* items as
fire
burglary
storm
collision
e!plosion
breakage
marine disasters etc.
1ia'ilit- Ins(#ance
7t protects the insured person against his liability to pay compensation for losses caused to
others by his own actions% and for whom he is responsible.
P#od(ct lia'ilit-@ 7t means that the manufacturers are liable for their products and should
compensate their customers for any in.uries their products cause.
$eins(#ance is the sharing of a large risk among two or more insurers% each of whom takes
responsibility for a fi!ed part of any loss% and receives a like proportion of the premiums.
'he p#emi(m is the regular payment that has to be made by the insured under the terms of a
policy. 'he insurers decide it.
/4
www.kozgazwarez.hu
5a#ine Ins(#ance
7t covers loss or damage to goods during sea transport. 7nsurers distinguish between total and
partial loss% ma.or perils and minor perils% and losses voluntarily incurred and those
involuntarily incurred.
Gene#al a.e#age Tdamage" is damage resulting from a voluntary loss.
Pa#tic(la# a.e#age is a partial% but an involuntary and accidental loss.
The main sections of marine insurance
1. /(ll@ 'he hull of vessel can be covered against damage or total loss by storm%
stranding% fire and other perils of the sea. 'here are time policies as well as voyage
policies.
&. F#eig*t@ 7t means the charge paid for carrying cargo. 7f the freight is payable on
delivery% it will be a matter for the ship-owner to insure against possible loss of
freight.
(. S*ip0o)ne#6s lia'ilities@ 'here are several@ not only cargo% passengers and crew but
other vessels% fi!ed installations like piers and wharves and even beaches are liable to
be damaged by the actions of ship.
/. T*e ins(#ance of ca#go is absolutely vital in the import and e!port trade. 'he
e!istence of an insurance policy in con.unction with a Cill of Gading means that
whoever purchases the goods by purchasing the CDG also subrogates the insurance
claim that may arise% if the goods are lost at sea. *argo policies refer to the movement
of goods e!ported from or imported to a country.
T*e main t-pes of a#go Ins(#ance
F.P.A. )ree of 6articular Average"@ 'his means that the insurance company will not
indemnify for any partial loss or damage due to minor perils such as seawater damage.
'he cargo is only covered against total loss and partial loss due to ma.or perils% such
as sinking etc.
7.P.A. With 6articular Average"@ 'his means that the insured is covered against total
and partial loss due to minor or ma.or perils.
A.A.$. Against All #isks"@ 'his type of insurance gives the fullest possible cover% but
only against those risks actually stated in the policy.
Bany marine policies also give cover against war risks% and strikes% riots and civil
commotions 8# and **".
05
www.kozgazwarez.hu
Floating Policies and t*e Open o.e#
#egular e!porters who make many shipments a year often go in for )loating 6olicies or Apen
*overs. 'hey estimate the number of shipments they are likely to make in the coming year%
and the total value.
'hey can take out a Floating Polic- for this figure% under which every shipment is
automatically covered.
Open o.e# is slightly different. 7t is non-reducing$ although it is usually only valid for
twelve months% there is no total figure for any individual shipment. 8uch a contract is
negotiated annually% at fi!ed rates for each type of goods.
:OA%&1A$Y
'o insure sy against damage to sg - biztosLtani vkit vmi kHra ellen
6roperty - tula.don% vagyon
'o recompense sy - kHrtalanLtani vkit
6rinciple - alapelv
7nsurable interest - biztosLthatM" IrintettsIg
,ffect - kJvetkezmIny% hatHs
'o apply to sg - vonatkozik vmire% tartozik vmihez
-tmost Rood )aith - .MhiszemSsIg
>ealings with sg - viselkedIs% magatartHs vkivel szemben
7ndemnity - kHrtalanLtHs
'o suffer sg - elszenvedni vmit
'o be indemnified for sg - kHrpMtolva vmiIrt
'o be restored to sg - helyreHllLtva% visszaHllLtva vmihez
kIpest
'o occur - bekJvetkezik% megtJrtInik
7nsurance policy - biztosLtHsi szerzKdIs% kJtvIny
'o cover sy against a risk - vkit biztosLt egy kockHzattal szemben
8tatistical probability - statisztikai valMszLnSsIg
*ollision - karambol
#einsurance - viszontbiztosLtHs
A like proportion of the premiums - a dL. hasonlM% arHnyos rIsze
6remium - biztosLtHsi dL.% .utalIk
Barine insurance - ha.MkHr biztosLtHs
'o distinguish between - kNlJnbsIget tesz vmik kJzJtt
Ba.or D minor perils - .elentKs D csekIly kockHzat% veszIly
Gosses voluntary incurred - tudatosan okozott vesztesIg O"
Gosses involuntary incurred - akaratlanul elszenvedett vesztesIg
8ection - rIsz% JsszetevK
Hull - ha.Mtest
?essel - ha.M teknK"
8tranding - zHtonyra futHs
'ime D voyage policy - idKtartam D Pt biztosLtHs
)reight - fuvardL.
*rew - legInysIg% szemIlyzet
)i!ed installation - rJgzLtett berendezIs% felszerelIs
6ier - mMlM% kikJtK
Wharf - rakpart
01
www.kozgazwarez.hu
'o be liable to do sg - ha.lamos megtenni vmit% ki van tIve
neki
?ital - fontos% szNksIges
7n con.unction with sg - vmivel Jsszekapcsolva% egyNtt
'o subrogate the insurance claim - HtszHll rH a biztosLtHsi igIny
>ue to sg - kJszJnhetK vminek% vmi miatt
#iot - lHzadHs% zendNlIs
*ivil commotion - nIpfelkelIs
)loating policy - keretbiztosLtHsi kJtvIny
Apen cover - nyitott biztosLtHs O"
'o go in for sg - foglalkozni vmivel% IrdeklKdni vmi irHnt
'o estimate sg - felbecsNlni% elKirHnyozni vmit
'o take out a policy - kivHltani egy kJtvInyt
)igure - becsNlt" szHm% Jsszeg
8lightly - kissI% nImileg
;on-reducing - nem fogyM% nem levonHsokkal mSkJdK
'o be negotiated annually - egy Ivre szMlM O"
3III. omplaints9 AdH(stments9 A#'it#ations
O5P1AINTS
;on-fulfilment of the contract may be caused by the seller or the buyer% or by a so-called 9Act
of Rod. When the buyer or the seller is at fault% a lette# of complaint is sent to him.
IF T/E SE11E$ IS AT FA&1T% the most usual cases for writing a complaint are as
follows@
7& )efect in quality 'he goods may be - of inferior :uality
- completely different from the goods on order
7n these cases the buyer may
refuse to accept the goods
accept them on condition of an e!tra discount
77& )efect in quantity
a" O.e#s(ppl-! 'he seller has delivered more goods than have been ordered.
b" S*o#ts*ipment! >eficiencyD8hortage in weight" ;ot enough goods have been
delivered. 7n this case the buyer may
#efuse to accept them
Accept them as a partial delivery
6ay for what has been delivered and cancel the rest of the order
0&
www.kozgazwarez.hu
777& )elay 7t happens when the seller fails to deliver in time. 7n this case the buyer urges
delivery and e!tends delivery time. 7f even then the seller doesn+t deliver% the buyer may
,!tend the delivery time once more and claim damages% or
Cuy the goods elsewhere at the seller+s cost and claim compensation for the loss
caused by the delay% or
*ancel the order altogether
7+& >nsuitable or faulty packing 7t can cause damage to the goods% and the insurance
companies will not accept responsibility about it. 7n this case
'he buyer may accept damaged goods if the supplier offers a discount.
7f the goods are badly damaged% they may be unsaleable and the buyer will demand
replacement.
+& )amages 'his is usually a matter for the insurance agent.
+7& !ther defects 8ometimes documents are not in order$ there is a mistake in the invoice% a
discrepancy between the invoice and GD* etc.
T/E %&YE$ A1SO 5AY %E AT FA&1T 7/EN
1. He refuses to accept the goods without sufficient grounds.
&. He may cause difficulties by omitting to give transport
instructions in time.
7n these cases the seller may store the goods at the buyer+s e!pense% or he is free to dispose of
them after a certain period of time.
(. He refuses to pay though he has already accepted the goods. 7n
such a case it is necessary to force payment by sending
reminders.
A 1ETTE$ OF O5P1AINT S/O&1" %E written in a firm but :uiet% courteous and
ob.ective tone. -sually a brief but clear statement of the essential facts best serves the interest
of the writer. 7t should contain all data relevant to identification of the consignment.
0(
www.kozgazwarez.hu
A"J&ST5ENTS
Cefore a complaint is admitted% it is necessary to decide )*et*e# it is H(stified genuine".
7. 7f the customer8s complaint is well founded% the claim must be granted promptly.
A frank acknowledgement of the error should be made together with the assurance
that precautions have been taken to eliminate similar errors in the future.
77. When the customer8s complaint is not Custified and the seller is not to blame% the
claim is refused in a firm but courteous tone without blaming the customer. Cut
the seller must carefully e!plain why he refuses it.
777. 7t may also happen that a third party% e.g. the carrier is to blame. 7n such cases the
seller does his best to make good the fault and to help his customer.
7f the order was s*o#t0s*ipped% you should dispatch the goods% which were not sent as soon
as you can. 7t is a good idea to a##ange pa-ment f#anco domicile% which means that all costs
are paid to the consignee+s warehouse. 'his will be accepted by the buyer as a sign of
goodwill and may prevent the customer from changing his supplier.
A complaint should be ans)e#ed promptly. 7f the e,planation cannot be sent immediately% a
letter should be dispatched to the customer saying that his claim is 'eing in.estigated% and
that he will be informed of the result as soon as the investigation has been completed.
As the p(#pose of t*e adH(stment lette# is to remove difficulty% it is not advisable to stress
the unfavourable elements in the situation.
A$%IT$ATION
7t may happen that t*e disp(te between the parties to a contract cannot 'e settled in a
f#iendl- )a-% then the parties are obliged either to resort to law or to refer the matter to an
arbitration court or arbitration tribunal. 'he proceedings in law courts are e!pensive and
slow and the legislation of one country differs considerably from that of another% so it is
:uestionable whether the .udgement of a court can be enforced in the country of the opposing
party.
A#'it#ation o(#ts have been established% which are attached to *hambers of *ommerce or
*ommodity ,!changes$ and arbitrators 7n an arbitration case% the persons who have a
dispute would like to settle it without litigation% and this saves both time and money." of
international reputation and with specialist knowledge assist in the settlement of disputes
which otherwise might lead to e!pensive litigation court action".
8everal inte#national ag#eements have been signed by a great number of countries in order
to make the awards the decision of the arbitrator" of arbitration courts enforceable abroad.
0/
www.kozgazwarez.hu
;ormally the parties #efe# a disp(te arising out of contract to one o# mo#e independent
pe#sons% rather than to a court of law. Arbitration must be ag#eed on initiall-% it cannot be
imposed afterwards. An arbitration clause a statement in a contract which indicates that both
parties agree to arbitration in the event of a dispute" must be inserted in the contract.
The advantages of arbitration proceedings are
8implicity
8peed
,conomy
'he avoidance of publicity
Accasionally there is mo#e t*an one a#'it#ato#. 7n such cases an (mpi#e is appointed%
whose decision is final if the arbitrators fail to agree.
'he Inte#national o(#t of A#'it#ation attached to the 7nternational *hamber of *ommerce
in 6aris was created to settle business disputes of an international character.
The standard 7** arbitration clause is as follows
WAll disputes arising in connection with the present contract shall be finally settled under the
#ules of *onciliation and Arbitration of the 7nternational *hamber of *ommerce by one or
more arbitrators appointed in accordance with the #ules.X
:OA%&1A$Y
*omplaint - reklamHciM
Ad.ustment - helyreigazLtHs% elrendezIs
Arbitration - dJntKbLrHskodHs
;on-fulfilment of a contract - egy szerzKdIs nem-tel.esLtIse
9Act of Rod+ - vis ma.or
'o be at fault - hibHsnak lenni
*ase - eset% Ngy
>efect in sg T deficiency - hiba% hiHny% hiHnyossHg vmiben
'o be of inferior :uality - rossz minKsIgS
'o accept sg on condition ofDthat - vmit elfogadni vmilyen feltItellel
Aversupply - tPlszHllLtHs% sPlytJbblet
8hort shipment - alulszHllLtHs
8hortage - hiHny
6artial delivery - rIsszHllLtHs
'o fail T to omit to do sg - elmulaszt vmit megtenni
00
www.kozgazwarez.hu
'o urge sg - siettetni vmit
'o e!tend delivery time - kitolni a szHllLtHsi hatHridKt
'o claim damages - kHrigInnyel elKHllni
>amage claim - kHrigIny
'o claim compensation for sg - kHrtalanLtHst kIr vmi miatt
Altogether - tel.es egIszIben
)aulty - hibHs
'o cause sg to sgDsy - vkinek vmit okozni
'o accept responsibility about sg - felelKssIget vHllal vmiIrt
Cadly damaged - sPlyosan kHrosodott
-nsaleable - eladhatatlan
A matter for sy - vkire tartozik% vki Ngye
>iscrepancy between sg and sg - eltIrIs vmi Is vmi kJzJtt
8ufficient grounds - elIgsIges ok% alap vmire
'o dispose of sg - rendelkezni vmirKl
'o force sg - kInyszerLt% sNrget% szorgalmaz vmit
#eminder - fizetIsi felszMlLtHs
)irm - hatHrozott
'o serve the interest of sy - vki Irdekeit szolgHl.a
#elevant to sg - fontos ahhoz% hogy
'o be admitted - elismerve
Qustified - .ogos% indokolt
Well founded - megalapozott% indokolt
'o grant sg - elismerni vmit
)rank - Kszinte
'o take precautions to eliminate sg - MvintIzkedIseket tenni vmi ellen
'o be to blame - hibHsnak lenni
'o make good the fault - .MvHtenni a hibHt
6ayment franco domicile - telephelyig fizetve
*onsignee - cLmzett
8ign of goodwill - .MszHndIk .ele
'o prevent sy from doing sg - megakadHlyozni vkit% hogy tegyen vmit
'o dispatch sg - kNldeni vmit
'o investigate sg - kivizsgHlni vmit
'o stress sg T to emphasize sg - hangsPlyozni vmit
01
www.kozgazwarez.hu
-nfavourable elements - kedvezKtlen elemek% tInyezKk
'o settle a dispute - egy vitHt elrendezni
'o be obliged to resort to law - kJteles Hllami bLrMsHghoz fordulni
'o refer the matter to swhere - az Ngyet vmi elI ter.eszteni
Arbitration courtDtribunal - dJntKbLrMsHg
6roceeding in law courts - el.HrHs Hllami bLrMsHgokon
Gegislation - tJrvInyhozHs
'o differ from sg - kNlJnbJzni vmitKl
Qudgement - LtIlet
*ourt - bLrMsHg
'o be enforced - vIgreha.thatM
'o establish sg - lItrehozni% elfogadni vmit
Arbitrator - dJntKbLrM
#eputation - hLrnIv
8ettlement - LtIlet% dJntIs
'o lead to litigation - pereskedIshez vezet
Award - dJntIs% LtIlet
,nforceable - vIgreha.thatM
'o refer a dispute arising out of contract - a szerzKdIsbKl fakadM vitHt vki elI
'o sy ter.eszti
'o be agreed on initially - indulHskor% elKre kikJtve
'o impose sg - kivetni% kikJtni vmit
*lause - zHradIk
-mpire - bLrM% dJntKbLrM
'o appoint sy - ki.elJl% kinevez vkit
7nternational character - nemzkJzi viszonylat
'o arise - felmerNl% adMdik
*onciliation - bIkIltetIs
Cinding - .ogerKs% kJtelezK
02
www.kozgazwarez.hu
3I:.Ad.e#tising and sales p#omotion> T#ade fai#s and e,*i'itions
A":E$TISING
A most important method of competition is advertising% the aid to trade that deals with the
problem of
giving information about goods and services
helps to put buyers and sellers in touch with one another
tells us what goods a supplier has for sale
emphasises their good points
Types of advertising
1. Indi#ect ad.e#tising! 7t means advertising to everybody as by posters or '?
commercials.
&. "i#ect ad.e#tising! 7t means advertising to individuals as by sending letters directly
to the people concerned.
(. Info#mati.e ad.e#tising! 7t tells us what goods are available and gives the facts about
them so that a consumer can choose the article that suits him best.
/. ompetiti.e ad.e#tising! 7t tries to persuade people to buy the goods whether or not
they want them. 7ts aims are to prevent sales from falling and to keep customers from
turning to other goods.
7nstead of arranging the advertising himself% the seller can employ an ad.e#tising agenc- to
do the work. 'his is a business organisation offering its clients a complete range of
communication and marketing services as well as the services of its artists and copywriters.
A":E$TISING 5E"IA
7& The print media
1. Ne)spape#s offer a number of advantages to advertisers@ fle!ibility% high
circulation% low cost per thousands of readers% prestige in a given community.
#egional newspapers are ideal for local campaigns.
&. 5agazine ad.e#tising also has advantages such as its selectivity it is ideal for
specific target markets"% e!cellent reproduction :uality% and long life. 7ts main
disadvantages are the lack of fle!ibility and the high cost per thousand readers.
(. "i#ect mail! 'he most common forms of direct mail are sales letters%
postcards% leaflets% folders% booklets% catalogues and company magazines.
'heir advantages are the selectivity% the intensive coverage% speed% fle!ibility
and personal approach. Cut they are :uite e!pensive and it+s difficult to obtain
good mailing lists.
03
www.kozgazwarez.hu
77& The broadcast media
1. A tele.ision comme#cial brings into the viewer+s living room a combination
of moving picture and speaking voice. 'elevision and radio both have the
advantages of a very personal approach and of e!treme fle!ibility. 'hey reach
a high percentage of the population and may be emotionally involving. 7n
general% mass consumption products are the biggest users of both media. 'he
main disadvantage of television advertising is high cost.
&. $adio can be very selective whereas television is usually a mass medium.
Advertising messages are fre:uently repeated on both of them.
777& !ther advertising media
'he print and the broadcast media account for over 25 per cent of total advertising
e!penditure in most countries. 'he rest is spent in a wide variety of media.
1. O(tdoo# ad.e#tising! 6osters% painted advertising and illuminated signs.
&. T#ansit ad.e#tising! 7t includes the ads inside and outside the public means of
transport and at stations.
(. Point of p(#c*ase displa-s! in shop windows or inside shops" 'hey help with
building a favourable image and provide information.
/. Specialit- ad.e#tising! 7t includes a variety of items carrying the advertiser+s
name and address and a short sales message% such as calendars% pens and so on.
0. "i#ecto#ies! Yellow 6ages" *ustomers can easily obtain advertisers+ names%
addresses and numbers.
I5AGES AN" SY5%O1S IN A":E$TISING
7& Slogans
Bost slogans advertise a product reward or some action to be taken. 'hey may use rhythm%
rhyme and alliteration% they are easy to remember% they help to differentiate a product and
provoke curiosity.
77& Trade marks
'his phrase includes any word% name% symbol% or device or any combination of these. A trade
mark is used by a manufacturer to identify his goods and distinguish them from these made by
others.
There are three types of trade marks
Crand names ;escafI% 6ersilF"
)irm names 6hilips% GRF"
7dentifying symbols for brands and companies
'he '#and is a kind of guarantee of the :uality of the goods and is often an important item in
a systematic sales promotion.
04
www.kozgazwarez.hu
SA1ES P$O5OTION
The most common forms of SP are
Affering free gifts or premiums
Arganizing prize competitions and games
Riving away coupons which can be e!changed for gifts or cash or used in part payment
8pecial offer packages which are either sold at below the normal price or contain a larger than
normal :uantity of the product
8amples
6acking 6ackages communicate and can promote sales."
'rade fairs and e!hibitions
T$A"E FAI$S AN" E3/I%ITIONS
'hey provide e!cellent opportunities for businessmen to promote their products or services
through display and demonstration. 'here are hundreds of e!hibitions that cover specialist
traders and industries. 7n some fields a fair serves as the main event in starting the selling
season. e.g. toy fairs"
6airs and exhibitions are useful when a company wants to
7ntroduce a new product
Beet a large number of new contacts in a short time this is the basic ob.ective of e!hibiting"
#educe the overall cost of selling
Cuild up the confidence of e!isting buyers customers have the chance of seeing the complete
range of products as well as meeting members of the management"
6rovide an opportunity for the market to see% touch% hear or try out the products and compare
them with competing brands
'aking part in an e!hibition can be very e,pensi.e therefore the potential audience should
determine how much a company should invest in a particular event.
!rgani3ing an exhibition
'he work of organizing an international trade e!hibition begins months or years in advance.
'he organizers have to plan and launch a p#omotional campaign% they should advertise in
the international and home press and contact chambers of commerce. 'he #(les and
#eg(lations governing an e!hibition are binding on all e!hibitors.
:OA%&1A$Y
Advertising reklHmozHs% hirdetIs
'he aid to trade a kereskedIs tHmogatHsa% segLtIse% segIdeszkJze
'o put sy in touch with sy vkit vkivel Jsszehozni% kapcsolatba hozni
'he good points of sg vmi elKnyei% .M tula.donsHgai
6oster plakHt
'? commercial '? reklHm
7ndividual egyIn% biz. szemIly
6eople concerned akire vonatkozik% akit Irint% aki Irdekelt
7nformative advertising tH.IkoztatM% felvilHgosLtM reklHm
15
www.kozgazwarez.hu
'o persuade sy to do sg rHvesz% meggyKz% rHbeszIl vkit% hogy vmit
tegyen
'o employ sy to do sg vkit foglalkoztatni% megbLzni vmivel
A complete range of sg tel.es kJrS
*irculation forgalom% pIldHnyszHm
6restige tekintIly% szakmai megbecsNlIs
#eproduction sokszorosLtHs
Geaflet szMrMlap
)older prospektus
Cooklet brosPra
7ntensive coverage intenzLv lefedettsIg% terLtIs
6ersonal approach szemIlyhez szMlMsHg% kJzvetlen kapcsolat
?iewer nIzK
'o be emotionally involving Irzelmileg bevonva% egyesLtve
Bass consumption products tJmeg-fogyasztHsi cikkek
Whereas ellenben itt"
'o account for sg vmivel szHmol% vmirKl szHmot ad birtokol.a"
Ad e!penditure hirdetIsi kiadHs% hird.-re felhasznHlt terNlet
'o be spent in swhere vhol felhasznHlva% kiadva
7lluminated signs fInyreklHmok
>isplay reklHmozHs% vmi kihelyezIse kirakatba"%
kiHllLtHs
'o build a favourable image kedvezK image IpLtIse% kialakLtHsa
>irectory cLm.egyzIk% telefonkJnyv% cLmtHr
6roduct reward termIkkLnHlat O"
'o provoke curiosity kLvHncsisHgot kelteni
>evice eszkJz% megoldHs% fogHs
'o distinguish sg from sg megkNlJnbJztet vmit vmitKl
'o provide sy with sg vkit vmivel ellHt% vmit nyP.t% biztosLt
>isplay and demonstration kiHllLtHs Is szemlIltetIs% bemutatHs
Ab.ective cIl
*onfidence bizalom
'o compare sg with sg JsszehasonlLtani vmit vmivel
'o determine sg vmit meghatHrozni% eldJnteni
6articular event kNlJnleges esemIny
'o launch a campaign elindLtani egy kampHnyt
#ules governing sg vmi irHnyLtHsHra% lebonyolLtHsHra von.M
szabHlyok
'o be binding on sy vkire vonatkozik% IrvInyes% .ogerKs
11
www.kozgazwarez.hu
3:. Inte#national financial instit(tions! I5F9 7o#ld %ank
I5F
7t is a cooperative institution with 123 member countries.
Purposes of the 7%6
'o maintain stable currency e!change rates
'o facilitate international payments
Inst#(ments of t*e I5F
7t lends money to members with li:uidity problems
7ts members inform each other about fiscal and monetary policies. 'echnical assistance
and publications."
Esta'lis*ment
'here was a great depression of the world economy in the (5+s. 'here was a great need for
cooperation in order to establish an innovative monetary system and an institution to
supervise it. 'he 7B) was founded in -uly .0DD at 'retton Eoods.
O#ganisation
1. 'oard of Governors ministers of finance for each country
&. Alternate Governors heads of central banks 'hey hold meetings once a year."
(. Executive )irectors represent the governments of their countries during the rest of
the year.
S(#.eillance
'hese days% member countries are allowed to choose their own method of determining their
currency exchange rates% but supervision by 7B) is necessary.
%o##o)ing
,ach member country pays in a sum of money called quota. 'his will be the source of loans
to member countries with a severely negative balance of payments. 'hese loans are called
S)=8s 8pecial >rawing #ights" and can be received in periodic allocations. An 7B) member
earns interest on its quota contribution only if other members borrow its currency.
Cefore a member country obtains the loan% it has to demonstrate how it will solve its payment
problem. 'hey can immediately withdraw the &0Z of its :uota. =epayment is made within (
or 0 years. *osts 5%0Z for service charges and commitment fees% 0Z for interest"
T*e aim of loans are devaluation% e!port encouragement and reduction of government
e!penditure.
1&
www.kozgazwarez.hu
7O$1" %AN2 G$O&P
7t is a family of multilateral development institutions owned by governments. 'hese
governments e!ercise their ownership function through Coards of Rovernors on which each
member country is represented individually.
It consists of fi.e inte#national o#ganisations!
7'=) "7nternational 'ank for =econstruction and )evelopment#% which a source of
loans to developing countries.
76* "7nternational 6inance *orporation#% which support private enterprises in the
developing world through provision of loans.
7)A "7nternational )evelopment Association#% which provides finance on concession
terms to low-income countries. 7t provides them with interest-free credits. *ontributions
are made by donor countries -8% Qapan% Rermany% Crazil% Hungary% =orea% 'urkeyF"%
and borrowers are Africa and Asia.
7*S7) "7nternational *entre for Settlement of 7nvestment )isputes#% which provides
arbitration services for disputes between foreign investors.
%7GA "%ultilateral 7nvestment Guarantee Agency#% which provides investment risk
insurance% and information on investment opportunities.
"(ties of t*e 7o#ld %ank G#o(p
=educing poverty #setting out a strategy$
Access to education% healthcare and social services
,conomic growth through increasing earnings of poor countries. 'he Cank lends
for broad improvements in economic policies towards reducing budget deficit
or stem inflation.
Promoting private enterprises
7)* lends directly to private companies. 7t finances pro.ects unable to obtain
funding from other sources.
7t lends on infrastructure pro%ects
7t focuses nowadays to ,astern and *entral ,uropean countries and the )ormer
8oviet #epublics
T*e connection 'et)een I5F and 7o#ld %ank
Bembership in the 7B) is a prere:uisite for .oining the Cank. World Cank lends to
developing countries while 7B) lends to its members.
F(t(#e steps
6ursuing economic reforms
7nvesting in people
6romoting private sector
#eorienting governments% so that the public sector can undertake essential tasks such as
human resource development
'o meet these challenges the Cank Rroup needs to build upon its two main roles@ the
financial and advisory roles.
1(
www.kozgazwarez.hu
:OA%&1A$Y
)iscal kJltsIgvetIsi
*ommitment fee utalHsi dL. O"
*ontribution hozzH.HrulHs
Access lehetKsIg
6rere:uisite elKfeltItel
Croad HtfogM
'o stem sg leHllLt vmit
'o pursue sg folytat% kJvet vmit
1/