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Proforma invoice word for Finance

[Music] i have encountered a lot of doubts regarding proforma invoice in my daily work life there is a lot of doubt regarding performer invoice like what is the performer invoice what are the different points to be mentioned in a performer invoice who issues a performer invoice and to whom a proper invoice is issued what are the different points to be covered in a proforma invoice etc etc after watching today's video till end you will have a clear conception regarding performing osi and i feel personally that all your doubts will get sorted so are you ready hi my name is a trade finance professional and a certified documentary credit specialist from london institute of banking and finance you are watching your very own channel trade finance world i would request you to subscribe my channel so that you get all notifications immediately when i upload first i shall start with what is perform invoice when you are very much keen to know about any particular goods and services and you are trying to make your mind whether to purchase or not based on price specification terms and conditions and all then you will request your seller to supply all details to you having any discussion verbally regarding terms and conditions of buying and selling quality quantity of the commodity and services how the payment will be settled and how you will get delivery instead of having a bubble convertible communication it is always better to have all things in written in that scenario proper my invoice comes into the picture ing to oxford dictionary latin word performing voice means preparing any document to show how usually anything is like prepared so here as the name suggests proforma invoice is a demo invoice which is supplied by the seller to the buyer to inform the terms and conditions of buying and selling to let him know about the quality quantity of the goods he will supply the price at which he will supply that particular commodity or services or both and uh how the payment uh will be like settled in this buying and selling agreement by buying and selling deal i say and how the delivery will be given to the prospective purchaser so till this point one thing is very much clear uh performer invoice is almost like a menu card in a restaurant when we go to the restaurant we pick up that menu card we go through it we read the menu card we choose we make a choice uh which food we want to order and ingly we place the order so after placing the order the restaurant served us that particular dishes and after having those dishes the commercial invoice comes into the picture or invoice i say comes into the picture ing to which we shall make payment so here also performing wise uh like a menu card in the table of a restaurant when you are trying to make your decision which product and services you want to purchase at what price what will be the terms and conditions is it favorable for you uh if it is not then there is a chance to bargain and to change those terms and conditions how much payment you are ready to make for that particular commodity or services if it is not favorable or not acceptable to you then again you will begin you will try to modify ing to your uh like uh choice and obviously seller will bargain that uh at how much price you can supply so uh proper invoice is just a piece of information regarding a buying and selling bill in which you will find all details regarding uh buying and selling and the particular commodity of services at the price at which it is being offered to you and different terms and conditions it also mentions the tax how much tax will be calculated on that particular buying and selling that means how much it will be the final price for that uh particular buying and selling deal after addition of the tax so all details will be available in that performing device as i have said when you are just reading that menu card in a restaurant uh that does not uh create any payment liability for you until and unless you are placing any order so here also when you are receiving performance in just reading it you are making uh your own judgment whether to purchase or not at that point of time no payment obligation is being created on you or no tax liability is not on you to pay any tax because till that time you have not placed the order to uh make a two purchase so uh here is a lot of similarities like a menu card in a restaurant and a professional invoice when you are in trade and trying to make a decision whether to purchase or not so again one thing is clear there is no tax liability when just you have received the invoice as a buyer or as a seller you are providing a profile invoice to a prospective purchaser there is no tax liability there is no payment obligation because when seller is providing that performance to a prospective purchaser there is uh no like you may say there is a no agreement that buyer will pay for that at that price which you have mentioned in the performer invoice so it will not be recorded in the books of accounts uh in case of purchaser uh prospective purchaser it will not be recorded as an account payable for that particular profile invoice because he has not agreed yet to make payment for that for my invoice uh saying uh in case of seller also it will not be recorded in the book of accounts as account receivable because there is no uh commitment from the side of buyer that he will uh purchase those rules at the price which you have mentioned in the proforma invoice so there is no uh accounting effect also and uh points to be noted that no law prescribe a proforma invoice or suggest a performance wise it is issued just like a like a standard business gesture so it's not like business customary that uh when someone is inquiring about any product or services and asking for all details uh terms and conditions and that time seller issue of professional invoice providing all details regarding the commodity and services or terms and conditions whatever the tax liabilities will incur at the time of purchase in future time so for my invoice is basically a demo invoice it's not a final invoice like a commercial invoice or tax invoice which will be generated at any future time if you both are agreed to carry forward that uh discussion of buying and selling so uh what happens when a seller supplied or provided a performance invoice to his prospective purchaser the purchaser will read that invoice he will make his decision whether to purchase that commodity or services or vote at that stipulated price which was mentioned by the seller in the performance uh whether the terms and conditions are favorable or not if not favorable they will again discuss about the terms and conditions whatever the delivery terms are mentioned in the performer invoice are favorable or not for that particular buyer he will think upon that if not favorable again the discussion will happen in this way a final uh like agreement will be prepared on which both party buyer and seller will be agreed upon and if all are good then seller will ship the boost to the buyer and at that time commercial invoice or tax invoice will be generated and in case of commercial invoice or tax invoice at that point of time in future liability of tax or liability of payment will be incurred so till the stage of proform invoice there is no tax liability there is no payment obligation and everything is a informative document just like a menu card in a restaurant table here in the screen i am showing you a proforma invoice or demo performer invoice or not related to any uh like existing company or any existing organization it has been prepared by myself or myself only just to show in this video here you see it is clearly written as performer invoice this proforma invoice word is very much important because by this word we can distinguish a performance invoice from a commercial or tax invoice and uh you also see the name of the issuing organization or selling uh entity is also there to whom it has been issued you can see the prospective purchaser under heading customer in ship to generally address of the customer to whom the goods will be delivered is mentioned uh some of it sometimes when the warehouse address is different from the registered address or the prospective purchaser in that case ship to address is mentioned in shipping details you can see it is clearly written by which mood we shall as a sailor we shall uh like shape the goods in waterway or in airways or by road whatever the mode of shipment will be mentioned in the shipping details and estimated shipment date when the goods may be shifted expected date of shipment what is the weight of the consignment total number of packages all details will be mentioned in the performance generally it is available in the performer invoice case to case basis these points differs and uh like a writing style also becomes different and uh but in general these points are covered in a performer invoice the main thing which is a very important to not notice in the description of the course in description of the goods uh like name of the product how many quantities being sold or seller is ready to sell what is the unit price what is the total price uh and marking of the goods sometimes it is written as part number and all all these details will be available in a performer invoice and in case of international trade one more thing is very much important to mention that is hs code for every product uh there is a specified hs code which is required at the time of exporting customs and uh it is also required at the time of taking delivery in the custom of sellers and buyer's country this way performer invoice is written and another important thing is terms and conditions uh based on which terms and conditions this buying and selling uh deal may happen those will be clearly written in the proforma invoice generally most important points are covered in a performance invoice like partial treatment or transshipment points will be there whether partial treatment of transit is allowed or not uh from which place to which means goods will be uh transported in this case uh you can take an example like from kolkata india goods are being sent to singapore uh what will be the payment term uh it is also an important point uh like uh here i am showing an example like 30 payment will be made in advance basis and 70 percent payment will be affected after 30 days of shipment so these all things are very much important to mention because these things are uh critical to consider at the time of taking decision uh when buyer is deciding whether to purchase or negotiate once again to make the terms and conditions more favorable bank details will also be available in a performance because when buyer is okay with all terms and conditions pricing and all then to make payment for that advanced part banking details are required uh in this way all details will be there in a performance and also you can see that total price of the goods have been mentioned with currency and after uh do after filling up all those things buyer will receive a performance invoice signed by the seller in this way performer invoice is prepared so today in this video we have learned about what is performer invoice when it is issued by whom it is issued what are the points are very much important to mention in a proforma invoice whether is then it is there any tax liability or payment obligation associated with the proper invoice when the tax liability or payment will be generated that means when the commercial invoice or tax invoice will get issued in a proper mine voice it must be mentioned as pro forma invoice it should be clearly mentioned in a performance and sometimes uh it may also may also be written like it's not a final invoice or it's not a commercial invoice uh whatever it is it can be written to clarify that it's not a commercial invoice or a tax invoice so just write in the comments below if you have still any doubt i shall clarify all your doubts and uh if you want to know anything more regarding my invoice then you are very much welcome to write in the comments below and also suggest me if there is any improvement or do you have any suggestion uh what topic i may discuss in next few videos i shall try to cover up on till the time stay safe stay tuned and keep learning bye [Music]