C-5-4- Proforma invoice


To make a contract effective, it's necessary that both contractors arrive at agreement. It depends on the contents of the both the proposal and of the general conditions of sales, and then on the acceptance of the agreement. The proforma invoice makes this agreement concrete.

The proforma invoice legally formalizes the various proposals from the exporter to a potential importer during all meetings and all mailings. It is intended for the importer in need of import authorization or the foreign currency necessary for payment.

The proforma invoice is part of an invoice list used within the context of international transactions. In fact, we also can list the consular invoice, the commercial invoice and the customs invoice.

5-4-1- The Proforma invoice: definition

The proforma invoice is therefore a legal document intended for the importer. It is presented just like a regular commercial invoice, but instead of having an invoice number, it must specify that it is a proforma invoice.

A business proposal is based on a written document and aims to find an audience. For this, the proforma invoice must be written in a language that can be understood by the importer.

The proforma invoice is also a document that allows the purchaser, in this case the importer, to complete the inherent steps for of the transaction like, for example, obtaining an import license or setting up a documentary credit. The importer is then responsible for gathering all administrative information needed from the relevant country.

The proforma invoice can therefore be considered a proposal. It may be sometimes be followed by a commercial invoice. Among other functions, the commercial invoice legally formalizes all the agreements that have been negotiated by both parties.

5-4-2- The Proforma invoice: the document

"PROFORMA INVOICE" must be appear written clearly on the document. The content pro forma invoice:

 

  PROFORMA INVOICE

  
  Eventually, a proforma invoice number,  
  the addresses of the two parties,  
  the terms of payment,  
  the method of payment,  
  the choosen Incoterms,  
  the currency,  
  the packaging,  
  the goods and their references (if they have any)  
  the type of goods,  
the weight, volume and quantity of the goods,
  the unit price and the total amount,  
  the time allowed for payment,  
  eventually, the validity period of the proforma invoice,  
  the mode of transport used,  
the necessary documents,
  the goods' country of origin,  
  the customs code,  
  and eventually particular conditions, for example bank guarantees or the opening of a documentary credit.  


The proforma invoice must be sent with a letterhead from the exporting company, that includes its registration number(s) (business identification number, VAT number, intra-community VAT number).

3-4-3- The legal scope of the Proforma invoice

The proforma invoice is therefore a business proposal and a commercial agreement. It establishes all the responsibilities of the exporter. If it is accepted in due time, the importer will be able, then, to make claims against the exporter in case of dispute. It has the legal validity of a commercial agreement.

  • *Note: We advise you to send your Proforma invoice, accompanied by your general conditions of export sales, in order to make sure you have the legal protection you need.
  • *Note: the acceptance of the proposal can be done over the phone or face-to-face.  To protect against this situation, it's recommended to stipulate in the general conditions of sales that the commercial contract, or pro forma invoice, is validated by a written acknowledgement of receipt of the agreement.