Unit_5_Sending_Proforma_Invoice.pptVIP

Unit Five Sending Pro-forma Invoice What is a pro-forma invoice? pro = for forma = form a pro-forma invoice = an invoice for form’s sake ∮ the importance of a pro-forma invoice A pro-forma invoice is one of the most important and common documents the importer receives prior to shipment. Many legal experts suggest that a pro-forma invoice be considered as a legally binding document, even though the price might change prior to the final sale of the goods. What is the function of a Pro Forma Invoice? A Pro-Forma Invoice is sent from the seller to the buyer for the following purposes： 1) to serve as a formal quotation or as a price reference. 2) to enable the buyer to make necessary preliminary arrangement, such as: ① obtaining an import license from his government ② applying for an L/C from his bank ③ applying for foreign currency if his currency is not readily convertible. 3) to serve as a request for payment in advance for goods ordered by an unknown customer or doubtful buyer 4) to inform the buyer of the amount dueto cover the goods sent ‘on approval’ or ‘on consignment’ 用作‘可退货’或‘寄售’货物的送达通知 Why so widely used in international business? 1. Considered, though to a less legal extent, as a binding agreement between the exporter and importer. 2. Required by some countries as part of their import licensing procedures. 3. Bankers and other financial institutions use a Proforma Invoices to open letters of credit, to arrange advance payments, etc., for importers. 4. The format of a Pro-forma invoice encourages exporters to include all the information that shall appear in an ordinary commercial invoice. Pro-forma Invoice VS Commercial Invoice In form, a pro-forma is identical to a commercial invoice except that it is marked ‘pro forma’. In nature, a pro-forma invoice is a document more formal than a quotation, though, unlike a commercial invoice, the price stipulated in a pro-forma invoice may change prior to the shipment of the goods. study