Proforma Invoices and Commercial Invoices are important documents used in the global trade process.
What is a Proforma Invoice?
A Proforma Invoice document is an important sales document that is created by the seller of goods. When an International order is confirmed, the seller will create a Proforma Invoice document and send it to the buyer. This document will confirm the details of the new order and usually includes the seller’s bank details to request payment. It’s important to note that a Proforma Invoice is issued before the goods have been produced or delivered. Read more about Proforma Invoices here.
What is a Commercial Invoice?
A Commercial Invoice document is issued to the buyer after the goods have been delivered or shipped. The commercial invoice format is essentially the same as a proforma invoice, but the commercial invoice confirms the exact quantity of the products that have actually been loaded and shipped. Read more about Commercial Invoices here.
What is the difference between a Proforma Invoice and Commercial Invoice?
The 2 documents are essentially the same thing, the difference may be that the final quantity on the Commercial Invoice can be different. In global trade it is common that the quantity of products ordered (from the Proforma Invoice) is different to the actual quantity of goods that have been shipped (Commercial Invoice). This difference in quantity of products supplied can be due to many reasons. Most commonly it’s because suppliers can have manufacturing issues or did not correctly plan how many products would actually fit inside shipping containers. Read more about some of the common shipping delays. After the goods have been shipped, buyers, Freight Forwarders and Customs will require a set of shipping documents to clear the goods into the country of import. The seller will provide the buyer with a “set” of shipping documents, which usually includes a Bill of Lading (proof of shipment), Commercial Invoice, Packing List and any other shipping documents as required.
Read how a Proforma Invoice works with a Purchase Order.
What information is included on Proforma Invoice and Commercial Invoice documents?
- Seller’s company name, address and contact details
- Buyer’s company name, address and contact details
- Method of Dispatch – Road, Rail, Air or Seafreight
- Type of shipment – FCL, LCL, Breakbulk or other
- Port of Loading and Port of Discharge (seaport or airport)
- Reference Number and Date
- Delivery Date
- Terms / Method of Payment
- Product Descriptions – including item codes, product descriptions, Unit Quantity, Unit Type, Price
- IncoTerm – The selling term agreed
- Any additional information
- Bank Details – the Proforma Invoice can include bank details requesting the buyer to make a payment
- Name, date and signature of authorized company representative
See below examples of Proforma Invoice and Commercial Invoice templates for global trade:
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