What is Proforma Invoice ? Why proforma invoice is prepared and how it is prepared ?

 What is Proforma Invoice  ? Why proforma invoice is prepared and how it is prepared ?

Proforma Invoice is the pre -shipment document basically used as quotation of expressing  goods details and pricing in sales contract.    

Proforma Invoice is  not  a final document in the export business . The main Important role of pro- forma Invoice is to  provide details about the  price of goods, quantity and availability of the exporting country.

The Exporter's main intention is to get an order from Importer and fulfill the shipment procedures.

When an exporter search trusted Importer in the international market . They start communicating each other by email, phone sometime they visit each others county and create a high trusted relation to enhance the business.

When the Importer shows the interest of the exporter's goods. The exporter prepares pro forma invoice and send to the Importer.

The pro forma Invoice contains: 

1 ) Exporter Name and Address. 

2 ) Importer Name and address 

3 ) Proform Invoice Number 

4 ) Proform Invoice date.

5 ) IEC Code

6 ) GST NO.

7 ) Incoterm

8 ) Payment term 

9 ) Origin of goods.

10 ) Notify party.

11 ) Port of Loading

12 ) County final destination.

13 ) Mode of Transport

 14 ) Description of Goods.

15) Quantity of goods.

16 ) Rate / Unit price / Currency

17 )  Amount Figer / words

18 ) Incoterm break-up value as per Incoterm

19 ) Total Invoice value

20/ ) Term and Conditation.

  The format of the pro forma Invoice arrangement of contain.

The Exporter can use his own format for making documentation part in the international business, there is no any condition to fix an official  format .

After receiving a pro forma Invoice The Importer read each and every thing and start negotiations, pricing with exporter, for example an exporter decided price for a particular product for 110 USD after negotiation with the importer the final price is fixed for 100 USD. If exporter agrees with the Importer then final order is placed . The Importer prepares " Purchase order " or  " an exporter order" and send to the exporter for arrangement of goods as per requirement.