The content of commercial invoice is almost same as pro-forma invoice. Commercial invoice is used to record ‘accounts receivable’ for the seller and accounts payable for the buyer. Invoice is a prime document of sale in any business. The seller issues commercial invoice at this point of time. As per agreed date of shipment, the seller arrange to ship the goods. Once after receiving pro-forma invoice from the supplier, the buyer sends a purchase order or opens a letter of credit to the supplier. The pro-forma invoice is issued before sales takes place. In other words, we can treat the pro-forma invoice as a ‘confirmed purchase order’ from the seller, although the official purchase order has to be issued by the buyer. So, we can treat pro-forma invoice as a document of commitment to sell the goods to the buyer as per the terms and conditions agreed between both in person, over telephone, by fax, email or any other mode of communication. Normally, purchase order or Letter of credit is opened on the basis of this pro-forma invoice sent by the seller. Just before this process, the seller has to send a ‘pro-forma invoice’ to buyer, mentioning complete details of agreement of sale. Once after agreeing the terms of contract of sale, the buyer has to issue a purchase order or Letter of Credit. Let us discuss – ‘when the pro-forma invoice is issued’ and ‘when invoice is issued’. ‘What is pro forma invoice’, ‘What is commercial invoice’ and ‘what is the difference between commercial invoice and pro forma invoice’. One of the common questions arises in a business terms is the ‘difference between pro forma invoice and invoice’. The information provided here is part of Online business guide courseĭifference between ‘Pro forma Invoice’ and ‘Commercial Invoice’ in Export Import Trade Posted on 08 April 2023 Category : Export
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