List of documents required for exports from India
A proforma invoice is a preliminary invoice sent by a seller before goods are produced or shipped. It outlines the estimated costs, product details, and payment terms agreed between both parties. This allows the buyer to review the proposed terms, confirm the details, and often make a deposit. Many exporters request a 30% deposit upfront and collect the remaining balance once production is complete or goods are ready to ship. This document helps both parties align on the order before committing to full production or freight arrangements. Streamlining the export process is a critical step for businesses looking to expand their market reach globally.
Product Description, Quantity & Pricing
- This document will be used in the customs clearance process upon arrival.
- By considering these legal aspects, businesses can ensure that their pro forma invoices facilitate rather than hinder their international transactions.
- Think of it as a detailed quote that’s structured like an invoice, often used for international trade and customs processes.
An invoice, whether paper or digital, is a legally binding request for payment. It confirms and records the products a customer bought and the amount they have agreed to pay for those products. In wrapping it all up, let’s underscore why carefully crafting your proforma invoice can be a game-changer in international trade. Specify the validity period of the proforma invoice to legally protect both parties.
Shipping terms
Customer information also goes at the top of your invoice and reflects the format of your company information. Include the customer’s name, billing address, shipping address (if different from billing address), phone number, and email address. Each invoice document should have its own reference number, and your bookkeeping system should keep a record of the numbers used. Your customers will use your invoice numbers to track payments on their end. If your business has moved beyond one-off invoices and now handles regular orders, stock tracking, or multiple buyers, Excel might start feeling limited.
Markup vs Profit Margin: Understanding the Difference in Global Trade (
A progress invoice is issued at set percentages of completion on long-term projects like construction, custom manufacturing, or agency retainers. It helps you fund work in stages and gives buyers visibility into project costs. Late payments can have a huge negative impact on your cash flow and, as a result, your business—i.e., your ability to pay your staff, rent, and suppliers. Proforma invoices typically follow a similar format to commercial invoices but are labeled “Proforma Invoice” and exclude demand for payment. Let’s break down the key fields you should always include for a proforma invoice format in Excel to download. You can create a proforma invoice step-by-step in Excel to avail yourself of a certain level of flexibility and accessibility that formal software tools can’t always match.
Watch this video to understand how to create a Proforma Invoice document. Try Shopify for free, and explore all the tools you need to start, run, and grow your business. Follow these tips to make sure your invoices are easy to understand and to get paid quickly. Create a draft order in your Shopify admin and send it how to create proforma invoice and purchase order documents for export as an invoice to your customer. If you use Shopify POS Pro, you can save a cart from any retail location as a draft order.
Advantages of Using Excel Templates
By providing a clear and comprehensive preview of the deal, pro forma invoices help streamline the process, making global commerce more efficient and predictable. When creating a proforma invoice for international trade, it’s essential to remember that while it is not a legally binding document, it does lay the groundwork for the final sale agreement. It serves as a detailed estimate that can have legal and financial implications if misunderstood or misrepresented.
Legal Considerations for Pro Forma Invoices
- Each proforma Excel template download will help you save time and enable you to edit, reuse, and duplicate the template as many times as needed.
- If your business has moved beyond one-off invoices and now handles regular orders, stock tracking, or multiple buyers, Excel might start feeling limited.
- Even if the invoice isn’t a final bill, mention your preferred payment window, currency, and terms (e.g., 50% advance, balance on delivery).
- It basically serves as a formal quotation that helps activate various steps in the export process, ensuring smooth communication, clear expectations, and legal compliance.
Proforma invoices are commonly used in export/import, wholesale transactions, and custom or made-to-order sales. For example, a proforma invoice offers clarity if a company needs pricing approval from management before placing a bulk order. Some export companies have created templates for Proforma Invoices and other shipping documents using Word or Excel templates.
Do not confuse it with the sales invoice because a proforma invoice does not request payment. From the perspective of an exporter, a pro forma invoice is a commitment to deliver the described goods at the specified price, and it should therefore be as accurate and comprehensive as possible. For importers, this document is often used to secure letters of credit or import licenses. Hence, the legal considerations are manifold and can significantly impact the efficiency and legality of the entire export process. Remember, the goal is to make the pro forma invoice a tool that not only serves its primary function but also bridges the gap between different business practices and cultures. For example, consider a manufacturer in Germany exporting custom machinery to a retailer in Brazil.
A purchase order is initiated by the buyer to request goods from a supplier, listing items, quantities, agreed prices, and other details like shipping terms and the delivery date. On the other hand, a commercial invoice is issued by the supplier after shipping the goods. It acts as a bill to the buyer, detailing the products delivered, their quantities, prices, and the total amount due, including any additional agreed upon expenses such as shipping costs. Note that Proforma Invoices are issued pre-shipment, i.e. before the goods have been produced or delivered.
Commercial Invoice cum Packing List
It provides the buyer with a clear and detailed preview of what to expect, which helps in avoiding misunderstandings and disputes. For the logistics teams, it’s a tool that ensures all parties are on the same page regarding the product details, terms of sale, and delivery expectations. From the perspective of the seller, the pro forma invoice is a commitment to sell the goods at the agreed prices and terms. It also serves as a risk mitigation tool, allowing them to gauge the buyer’s seriousness and capacity to complete the purchase.
With tools like Infinity, generating GST-compliant, buyer-friendly proformas becomes a breeze. You save time, avoid costly errors, and get paid with fewer hiccups. Think of this document as your export agreement on paper—it sets the tone for the entire transaction. If anything’s unclear or missing, you might face delays, miscommunication, or lost business.
