Quotations and Pro Forma Invoices: export and import transactions
Many export and import transactions, particularly initial transactions, begin with the receipt of an inquiry from abroad, followed by a request for a quotation. A pro forma invoice is a quotation prepared in the format of an invoice; it is the preferred method in the exporting and importing business.
A quotation describes the product, states a price for it, sets the time of shipment, and specifies the terms of sale and terms of payment. Because the foreign buyer may not be familiar with the product, the description of the product in an overseas quotation usually must include more detail than is required in a domestic quotation.
A pro forma invoice – a quotation prepared in the format of an invoice – may include many more details than you’re used to writing into your quotations, but all that extra detail can save time and prevent errors later on.
The description should include on Quotations and Pro Forma Invoices:
- Seller’s and buyer’s names and addresses
- Buyer’s reference number and date of inquiry
- Listing of requested products and a brief description
- Price of each item (it is advisable to indicate whether items are new or used and to quote the price in U.S. dollars to reduce foreign exchange risk)
- Appropriate total cubic volume and dimensions packed for export (in metric units where appropriate)
- Appropriate gross and net shipping weight (in metric units where appropriate)
- Trade discount (if applicable)
- Delivery point
- Terms of sale
- Terms of payment
- Insurance and shipping costs
- Validity period for quotation
- Total charges to be paid by customer
- Estimated shipping date from an origin port or airport
- Currency of sale
Pro forma invoices are not used for payment purposes. A pro forma invoice should include two statements – one that certifies that the pro forma invoice is true and correct, and another that indicates the country of origin of the goods. The invoice should also be clearly marked “pro forma invoice.”
Pro forma invoices are models that the buyer uses when applying for an import license, opening a letter of credit, or arranging for funds. In fact, it is a good practice to include a pro forma invoice with any international quotation, regardless of whether this document has been requested.
When final commercial invoices are being prepared before shipment, it is advisable to check with your local Commercial Service office for any special invoicing provisions that may be required by the importing country.
If a specific price is agreed on or guaranteed by your company, the precise period during which the offer remains valid should be specified.
Among the various systems that help international commerce, the Intradebook platform has the functionality of being able to issue the Proforma Invoice in some languages.
Based on “A basic guide to exporting”, U. S. Commercial Service.