Personally I like to place my business address at the bottom of the page or the footer. To do this go to the floating bar and click on the button, 'Switch Between Header and Footer.' This will open a dotted box at the bottom of the document. You can type your office address here or anything you see fit for your letterhead. Again you can format the text by choosing the font, font size, color, align the text, etc.
Creating Envelopes _ Your letter will not be complete unless you have an envelope also formatted appropriately. What's good about this function is that you can either customize your own envelope or allow Word to come up with a matching envelope to the letter you have written using the application. What it does is it automatically copies the address and uses it to create the envelope. That helps you do away with manual typing.