Proforma invoice as a comprehensive preliminary document in trade
What is a proforma invoice?
A proforma invoice is a preliminary document issued by a seller listing all the goods or services to be supplied, their quantities, prices, and other relevant terms and conditions. It is not a request for payment, but rather an outline of the proposed transaction issued before the goods are delivered or services performed.
The proforma invoice helps the buyer estimate the total cost of the transaction, including taxes, shipping costs, or other possible charges. It allows the buyer to arrange for funds, confirm details, and ensure compliance with agreed terms.
Proforma invoice vs other types of invoices
To better understand the proforma invoice, it is australia email list important to know how it differs from other types of invoices. 
What is the difference between a proforma invoice and a commercial invoice?
The difference between a proforma invoice and a regular invoice is quite clear. The proforma invoice acts as an informative document preceding the commercial invoice. It is not legally binding and does not how to structure high-impact digital products? require payment. It serves as a mere agreement.
A commercial invoice, on the other hand, is a formal, legally binding bill that must be paid. It is issued upon delivery of goods or provision of services and indicates that the transaction has been completed. Commercial facebook users invoices are crucial for customs clearance, tax settlement, and legal compliance in international trade.
What is the difference between a proforma invoice and a quote?
At first glance, it may seem difficult to distinguish a proforma invoice from a quote because their purposes are closely related. Like a proforma invoice, a quote informs the client about the price and terms of the transaction. However, the difference between the two lies in the details and the timeline.
A quotation is given to a potential customer as a commercial proposal, with estimated costs listed in the document. It is not a final transaction document and does not entail an obligation to pay. A pro forma invoice is issued at a later stage in the business relationship, for example when a deal has been closed, but prices need to be clarified, adjusted and fully confirmed.
What is the difference between a proforma invoice and a delivery note?
While a proforma invoice details a proposed transaction, a delivery note is a document that comes into play when the sale is completed. It reaches the buyer along with the ordered goods and serves as proof that the goods have been delivered according to the agreed terms and conditions.
To sum it all up, here is a table listing the differences between the above-mentioned types of invoices:
What is a proforma invoice used for?
Proforma invoices are useful tools in trade as they provide crucial information to both the buyer and the seller. They are mainly used for:
- Price quote : provide a detailed list of goods and services;
- Goods declaration : specify the type, quantity and quality of goods to be shipped;
- Terms of sale : define payment terms, delivery details, and other conditions.
When it comes to international trade, a proforma invoice plays a crucial role in customs clearance. Customs authorities require detailed information about any imported or exported goods. The proforma invoice encourages transparency and provides authorities with essential information about the shipment, even before the goods reach their destination.