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Proforma Invoice A Proforma Invoice Can Boost Your International Sales If you are in the business of exporting products to another country one of the most important documents you are going to need is the proforma invoice. This vital document is used to cover several key aspects of the business transaction that you are conducting and can be used to ensure that there are no misunderstanding that can come up between the seller and the buyer that may end up being costly at a later time.

The proforma invoice is usually issued by the exporting company before the actual transaction takes place. This is especially prevalent in Third World countries that have demonstrated previous balance of payment problems and where there is a need to obtain import and foreign exchange permits from the local government. To be effective there are several very important things that the proforma invoice must cover.

Of course the most important issue is a very accurate description of the particular item to be exported. It is not OK to send an invoice that says 10 tons of beans; the customers’ wants to know what kind of beans they are and are they Imperial tons or metric tons.

By the same token you could send someone an invoice that states flash frozen cod, packed in clear plastic bags, not labeled for resale and be just fine. As long as the customer knew in advance of the lack of labeling if there were any issues the problems would be his. The proforma invoice must also state the type of currency that is acceptable as a form of payment and how it is to be paid.

An example of this might be payment for the flash frozen fish is to be made in Rupees and the balance owed must be paid within 30 days from the date the receipt for delivery is signed. In other words it is up to the exporter to make his payment desires known up front to make sure there is no confusion.

The third thing that must be made clear on the proforma invoice is the costs associated with freight and insurance that are included in the total price quoted. This can be very important in the export world because if a competitor quotes his price as CIF (cost including freight) and you do not he is more likely to get the sale. The last thing you need to include on your invoice is an expiration date for your price.

If you don’t do this your customer might come back in six months and still expect the quoted price even if your costs have made meeting that price impossible. Using the proforma invoice is the best way to have confidence in your international transactions and make your buyer feel confident in all of your transactions.

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