![]() Whereas commercial invoices do not have an expiration date, as they serve as a finalized record of the transaction. Validity: Proforma invoices typically have a validity period, ranging from 30 to 90 days, as they are influenced by factors such as exchange rate fluctuations and variations in raw material costs.Contents: A proforma invoice simply provides an estimate of the goods and services being offered, while a commercial invoice includes finalized details, such as the HS code, Incoterms, legal company information for both parties and the exporter's signature.Timing: A proforma invoice is issued before the actual sale or delivery of goods or services, while a commercial invoice is issued after the agreement is reached by all parties involved and the goods or services are sold.Legal status: A proforma invoice is not legally binding and can be subject to change during negotiations, while a commercial invoice serves as a formal record of the transaction, obligating the buyer to make payment as per the agreed terms and is required for customs clearance.Purpose: A proforma invoice serves as an estimate or quotation for potential buyers to evaluate costs and make informed decisions, while a commercial invoice is a legally binding document that confirms the final sale and serves as a formal request for payment.Now that we have a clear understanding of the purpose and contents of each type of invoice, let's explore the key differences between them: Key Differences between Proforma and Commercial InvoicesĬomparison between proforma invoices and commercial invoices In the event of a dispute, the commercial invoice serves as evidence of the agreed-upon terms and conditions of the transaction. The commercial invoice is vital in calculating import duties and taxes, as well as ensuring that the goods being imported are legally compliant with the destination country's regulations. The terms of payment and any applicable discounts.The Incoterms (International Commercial Terms) agreed upon.The Harmonized System (HS) code for each item.It is a crucial document that is required for customs clearance purposes and is an essential part of the international trade process. Unlike the proforma invoice, a commercial invoice is a legally binding document that serves as a record of the finalized sale agreement between the seller and the buyer. It is not a legally binding document, meaning that the terms and conditions outlined in it can be subject to change and negotiated before the final sale is made. The primary purpose of a proforma invoice is to give the buyer an idea of what to expect in terms of cost, delivery, and other aspects of the upcoming transaction. Any applicable discounts or additional charges.The Incoterms (International Commercial Terms).The price per unit, currency and the total cost.A detailed description of the goods or services.The seller's and buyer's company information.This document serves as an estimate of the goods and services being offered and typically includes information such as: Proforma Invoice - A Preliminary DocumentĪ proforma invoice is a preliminary document provided by the seller (in this case, the Chinese supplier) to the buyer (importer or company) before a formal sale agreement is made. In this guide, we’ll explore the distinctions between proforma invoices and commercial invoices, their functions, when they should be used and their importance in international trade. While both of these documents are essential components of international trade, it's important to understand their unique purposes, uses and roles in the import process. One area that often raises questions is the difference between a proforma invoice and a commercial invoice. Among the most essential documents in global transactions are proforma invoices and commercial invoices. The world of international trade can be complex and full of intricate steps and details, especially when it comes to different types of documentation. Proforma vs Commercial Invoice : What's the difference? ![]()
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