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Simple proforma invoice template for Finance

welcome to this episode of trade nugget an initiative of A2 Global on trade nuggets we present you with simple tips to facilitate your International Trade transactions I'm and I work as a trade and Export Management Consultant on this episode of trade nuggets I will be walking you through the step by step process of preparing a performer in you learn what a performer invoice is the element it contains and its importance in international trade if you've ever sold a product or a service you might have been asked to prepare a performer invoice this request can sometimes be stressful because you want to impress the buyer and secure the sale however there's no need to worry first let's understand what a performer invoice is in international trade the performer invoice is a preliminary bill of sale sent to the buyers before the shipment or delivery of the goods unlike a commercial invoice it is not a request for payment instead a performer invoice a promise from seller to the buyer um to provide the listed Goods at set at um specified prices and conditions since the performer invoice is not a demand for payment why then is it important in international trade first is for the quotation and contract bases as a quotation to it provides detailed quotes to the buyer stating the goods or service the prices the terms of sale for contract formation it helps in forming the basis of the sales contract between the buyer and the seller specifying the terms and conditions of the trade the second reason is for facilitating Import and Export procedures for Customs clearance Customs authorities often use the performer invoice to assess duties and taxes similarly importers may need the performer invoice to obtain necessary licenses and permits for bringing Goods into their country the third reason is for financial and payment agreements the performer invoice outlines the payment terms if it's Advanced payment letter of credit or open accounts this helps both parties understand their financial obligations for banking transactions some banks may require a performer invoice to issue letters of credit or other financial instruments used in international trade the fourth reason is for Logistics and shipment planning for shipping Arrangements it gives the needed details for organizing the transport and insurance of the goods like the weight the volume and the size for inventory management it helps both the seller and the buyer plan their inventory and storage needs the fifth reason why you need a performer invoice is for legal and Regulatory Compliance performer invoice serves as a legal document um in that he outlines both the obligations of the buyer and seller and in the case of dispute resolution it can be used to resolve disputes as a regulatory requirement it ensures compliance with international trade regulations including Import and Export controls and trade agreements the sixth reason for a performer invoice is the calculation of tax and duties it helps calculate the exact taxes and the duties on Goods um you know that's important because you need to figure out the cost and the prices it also serves as a proof of the plan transaction um so that tax authorities can be informed and it can support tax reforms and tax claims the seventh reason um performer invoice are useful is for business planning and forecasting they help um businesses it could help your business to budget and predict by giving estimates clear estimates of the cost and revenue um from International sales they also assist with market analysis and planning by offering insights into pricing demand and competition lastly performer invoices build trust and transparency a performer invoice improves the transparency in the transaction by clearly outlining the sales details um um um clearly and this Fosters Trust between the buyer and seller it also helps to build customer confidence by providing um detailed information upfront and that reduce the uncertainties in international trade transactions now you know why a performer invoice is important the next thing is for us to look at the key elements of a performer invoice there are five of them the first one is the seller and buyer information the second is the description of goods and services the third is the terms of sale the fourth is the shipping information the fifth are other relevant information in summary a performer invoice is a critical tool in international trade it helps ensure smooth transparent and efficient transactions between the buyer and the seller across borders now let me walk you through the process of preparing a performer invoice are you ready okay let's go the first step is to collect all the relevant information needed to prepare performer invoice step two is to create the invoice voice with the following details first is the title clearly label the document as performal invoice assign a unique invoice number for reference include the dates when the performer invoice is issued the next thing is to State the validity period during which the performer invoice is valid say maybe 30 days 45 days or 60 days I'm still walking you through the stepbystep process of preparing a commercial in a performer invoice step three is to add the seller's details this will typically comprise of the company name his address the contact person in the company the email and phone number and the tax identification number step four is similar to step three but in step four you are adding the buyer information which also consists of the company name the address the contact person the email and phone number and the tax identification number step five is to give a detailed description of the goods or services being sold for the product description or service description include the name of the product the model and any other important details add the HS code which is the harmonized system code for Customs the quantity how many units are you selling the unit price the price for each product the total price which you which you get by um calculating by multiplying the quantity by the price step six is to include the terms of sale um the payment terms how and when will payment be made will payment be by Advanced payment would it be by letter of credit um would it be paid in 30 days the next thing is the delivery terms the inco terms um specify what inot terms you're going to be using am I going to be using C and F am I to be using fob and the place of delivery where are the good products going to be delivered the next thing is to add the currency in which the transaction will be conducted step seven is to add the shipping information um what is the shipping method are we shipping by land C or air where is the port of loading that the ports are going to be loading from where is the port of discharge where the goods are going to be delivered to the other party what is the estimated shipping date um 30 days from now 60 days from now 100 days from now um what's the estimated delivery date when are you going to get the product at destination provide the expected date of delivery step eight is to include your taxes um calculate the estimated taxes due the duties due and any other charges that can be incured we're on step nine now of preparing the performer invoice calculate the total amount pay add up all the line items um include applicable taxes and duties add any extra charges some of the totals taxes duties and additional tax additional um charges um where you need to um put up all other cost add everything and arrive at a grand total for step 10 you need to provide additional information um this might include Bank details special instructions um or notes for the buy buy and then signature um for the buyer and um typically is the authorized representatives from both the buyer and sellers that sign the documents I've taken you through 10 steps to prepare your performer invoice the last step is to review and finalize performer invoice double check the information on the performer invoice review all the details check if they are correct and they complete get approval um from the internal departments like Finance or sales um so that they are also in the know of what is stated on the performer invoice then send the performer invoice to the buyer for their review and acceptance okay we've spoken about the performer invoice now here's a sample showing you the 10 steps that I outlined earlier um if you look up here that's the title the performer invoice here's the invoice number look at the date and the validity period here's the seller's information um the name the address the city or country the contact person the email address the phone number the tax ID similar details for the buyer you see it's followed by the buyer's information his name his address country the contact person the email address the phone number and the tax ID we still looking at the sample performer invoice if you look here you see the product description the item number the description the HS code the quantity the unit price and the total price if you move down a bit you see the sub total the taxes the shipping charges and the grand total if you move further down you look at the payment terms um 50% Advanced payment 50% upon delivery it doesn't necessarily have to be this way you'll follow what you typically offer in your own business the delivery terms inco terms CFR at New York Port that's where it's going to be delivered remember we talked about the currency that the transaction is going to be transacted in in this case it is the US dollar the shipping method here is by C the port of loading is a papa Port the port of discharge is New York Port estimated shipping date from here is 30th of July estimated delivery date is 15th of August then the bank details if you need to add um the authorized signatur at the end of the document you can create a space for the authorized signatur to sign in conclusion creating a performer in voice is like putting together a puzzle and it's very simple if you follow the steps start by collecting all the details about your transaction including who is buying and who is selling list out the goods with precise descriptions quantities and prices next you spell out payment and delivery terms be sure to include any taxes and duties don't forget to give your invoice a unique number and issue date and a validity period after you've pieced everything together double check it for any mistakes sign it and send it off to the buyer this process keeps everything transparent and everyone on the same page no surprises thank you for joining me today on trade tips on trade nuggets with I to by I hope you can now prepare a perform invoice by yourself using the steps that we have listed if you require a performer invoice template or need help preparing a performer invoice please send an email to info@ fortress2 global.com watch out for our next video providing you with simple tips to facilitate your International Trade transactions please remember to like subscribe and share this video enjoy your day and I wish you all the very best in your International Trade Journey