Proforma vs Commercial Invoice : What’s the difference?

The world of international trade can be complex and full of intricate steps and details, especially when it comes to different types of documentation. Among the most essential documents in global transactions are proforma invoices and commercial invoices. 

One area that often raises questions is the difference between a proforma invoice and a commercial invoice. While both of these documents are essential components of international trade, it’s important to understand their unique purposes, uses and roles in the import process.

In this guide, we’ll explore the distinctions between proforma invoices and commercial invoices, their functions, when they should be used and their importance in international trade.

Proforma Invoice – A Preliminary Document

A proforma invoice is a preliminary document provided by the seller (in this case, the Chinese supplier) to the buyer (importer or company) before a formal sale agreement is made. This document serves as an estimate of the goods and services being offered and typically includes information such as:

• The seller’s and buyer’s company information
• A detailed description of the goods or services
• The quantity of items being supplied
• The price per unit, currency and the total cost
• Shipping and handling fees
• The Incoterms (International Commercial Terms)
• Payment terms and conditions
• Any applicable discounts or additional charges
• The proposed delivery date

The primary purpose of a proforma invoice is to give the buyer an idea of what to expect in terms of cost, delivery, and other aspects of the upcoming transaction. It is not a legally binding document, meaning that the terms and conditions outlined in it can be subject to change and negotiated before the final sale is made.