Shipping Invoices - Do you know the difference?

A typical export process includes the use of both the proforma and commercial invoices. Shippers who don’t know better may think the two forms are interchangeable—but they’re not it is imperative the difference is known.

In this blog, we will explain the difference

The Proforma Invoice

A proforma invoice is simply a quote prepared by the exporter to resemble a commercial invoice. An international sale often begins with a letter of inquiry from a potential buyer expressing interest in one or more of your products, outlining the terms of their interest and asking for an informal or formal quote.

A proforma invoice should be valid for a specific period. Because you are often quoting not only the cost of your product but also the transportation cost, a reasonable time should be allowed for the buyer to respond, after which the proforma invoice is no longer valid.

The Commercial Invoice

Once the buyer and the seller agree upon the terms of the sale and the buyer has accepted the terms of the proforma invoice—usually by submitting a purchase order that the seller has accepted—the transaction is ready to proceed. When the goods are ready to ship, the seller issues a commercial invoice.

The commercial invoice is the primary shipping document used by customs worldwide for commodity control and valuation, providing important instructions and information.