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Commercial invoice sample for Purchasing

[Music] usually a proforma and a commercial invoice are used during the export process shippers who don't know better may think the two forms are interchangeable but they're not in this video I'll explain the key differences before we get started make sure you subscribe to this channel so you don't miss any of our videos sharing practical advice for exporters and importers let's look at how proforma and Commercial invoice are different and the role each form plays in an export shipment an international sale often begins with a letter of inquiry from a potential buyer interested in your products they may ask for an informal or formal quote enter the proforma invoice a quote prepared by the exporter that resembles a commercial invoice why might a buyer request a quote in the form of a proforma invoice so they can arrange a letter of credit or other financing to pay for the goods and because certain countries require a proforma invoice if they tightly control their currency exchange rate require an import permit or protect local industry by placing import quotas on certain types of goods reduce your risk by including an expiration on your proforma invoice Transportation costs which can fluctuate wildly are often included in the quote so allow a reasonable time for potential buyers to respond but after that time period it should no longer be [Music] valid after the buyer accepts the terms of the proforma invoice usually by submitting a purchase order that the seller has accepted the transaction is ready to proceed when the goods are ready to ship the seller issues a commercial invoice the commercial invoice should list the amount owed by the buyer to the seller and when and how payment should be made the commercial invoice is the primary shipping document used by Customs worldwide for commodity control and valuation it provides important instructions to the freight forwarder us and foreign Customs the import broker the Marine insurance company both your bank and the buyer's bank because so many rely on the commercial invoice for Vital Information it's important that it includes certain information download our free template to ensure you don't miss something to summarize despite looking similar these are the three key differences between these two documents a proforma invoices a quote issued before the buyer and seller have agreed on the terms of sale this will be outlined in the proforma invoice the commercial invoice is issued after an agreement has been made and goods are ready to ship some of the information on both types of invoices may be similar but the commercial invoice represents the final agreed upon details of the transaction including any additional export or import control information in the absence of a formal sales contract the proforma and Commercial invoices are part of the paper trail that encompasses the contract between the buyer and the seller the proforma invoice is used for negotiation and by the buyer to obtain any necessary import permits overcome any potential import restrictions and arrange for a letter of credit or some other payment process the commercial invoice is an instrument for collecting payment and used by Customs agencies to identify appropriate duties taxes and other import fees and to ensure compliance with export requirements it also provides information about moving the goods from the seller to the buyer if you create the proforma correctly the difference between it and a commercial invoice may be minimal but they're important both are critical to your exporting process and both are among the dozens of export documents ments that you can create quickly and easily using shipping Solutions export documentation and compliance software thanks for watching if you liked this video we'd appreciate it if you'd like it and share it and subscribe to our channel for more videos sharing real practical advice for exporters and importers you'll also find hundreds of articles about every aspect of exporting at shippings solutions.com blog check below for a link