Proforma Invoice vs Commercial Invoice
When it comes to international trade, there are two key documents that are used to manage invoices: the proforma invoice and the commercial invoice. While these documents have similar purposes, there are important differences between the two that must be understood in order to ensure compliance with international trade laws.
A proforma invoice is an invoice sent with goods before the actual sale takes place. The proforma invoice serves to provide the buyer with an estimated cost of the goods and shipping fees, as well as a description of the goods. This document is not a legally binding contract, but it does provide the buyer with a good sense of the cost of the goods and shipping.
A commercial invoice, on the other hand, is a legally binding document that is sent to the buyer after the sale has been completed. This document contains detailed information about the goods purchased and the cost of them, as well as information about the seller and buyer. This document is required by customs officials to ensure that the goods are properly taxed and to verify the value of the goods.
Both proforma invoices and commercial invoices are important documents in international trade, and they both serve different purposes. Proforma invoices are used to provide an estimated cost of the goods before the sale is completed, while commercial invoices are used to provide detailed information about the goods purchased and the cost of them. It is important to understand the differences between the two in order to ensure compliance with international trade laws.
Frequently Asked Questions
FAQ 1: What is the difference between a proforma invoice and a commercial invoice?
Answer: A proforma invoice is a document sent from a seller to a buyer to confirm the details of a purchase before an actual invoice is issued. It is a preliminary bill of sale and not a true invoice. A commercial invoice is a detailed invoice issued by a seller to a buyer for the purchase of goods or services. It includes the quantity and type of goods sold, the unit price, the total price, and any applicable taxes.