What is a proforma

Proforma

Proforma is a type of document that the seller issues as a sales proposal or determination of the value of goods, services or sales conditions by specifying the expiration date at the buyer’s request. The validity date is specified in the proforma and after the expiration date, its validity is lost.

Proforma is the first document issued by the seller in a transaction. In this pre-invoice document, all the initial agreements between the buyer and the seller are included.

Or in other words, it can be defined as follows:

In the proforma, the seller informs the importer/buyer of his conditions for exporting the specified goods. By obtaining the proforma from the seller, the buyer or the importer can apply for the necessary permits to import goods or buy foreign currency.

There is also a point to be mentioned that sometimes the proforma has a legal ruling if both parties approve it.

It is better to mention in the proforma that if the buyer does not pay the advance payment within the specified time, the seller has the right to modify the price. It should also be mentioned that if the load stays in the destination country due to the non-delivery of a letter of credit, the responsibility (costs, etc.) is for the buyer.

Items included in the proforma

After we have defined the proforma, we will deal with the items contained in it. In this section, we bring you the items that are included in the proforma.

• Incoterms
• Date of sending the goods
• How to send goods
• Country of manufacture of goods
• Proforma number
• Buyer’s name and address
• Expiration date of proforma
• The address of the origin and destination of the goods
• Seller’s company and trademark
• Product standard number (optional)
• Exact date of issuance of proforma
• Name of the shipping company (optional)
• How to pay the money and its exact time
• Seal and signature and name of the issuer of the proforma
• The table related to the desired product or service
• Name of the bank and registration of address and account number (optional)
• The address of the company and the telephone and fax number of the seller in the header section
• Name of arbitrator or court for arbitration in case of dispute between the parties

Importance and application of proforma

The proforma has a lower value than the invoice, and this shows the value of the proforma compared to the invoice, that is, the invoice has a higher value compared to the proforma. The pre-invoice (Proforma) is used in many jobs and trades such as import and export of goods, traders or people who have workshops or factories.

Cases of using proforma

• Pre-sale is also used in export contract auctions.
• When the buyer is a foreigner, issuing a proforma is required. This is because the foreign buyer may need to provide a proforma to obtain the necessary import permits to pay for the goods.
• The proforma contains the price quote, and makes it possible to have sales conditions. If the price quote is accepted by the buyer, a contract is concluded between the two parties.

Difference between invoice and pre-invoice (proforma)

Maybe it has occurred to you that what is the difference between invoice and pre-invoice according to the mentioned definitions. We will explain it to you in this section.

A business list, also known as an invoice, is a sheet issued by the seller and contains information such as the details of the seller and the buyer, the date of payment, the total price, etc. Proforma is a sheet and document that is issued by the seller of goods before the transaction takes place. The initial agreement between the buyer and the seller is included in the proforma .The information in the proforma includes product name, product quantity and product price. The proforma or pre-invoice is an offer from the seller and does not create any obligation for the buyer to pay.

So, according to the explanations provided, we realized that one of the most important differences between a proforma and an invoice is that issuing an invoice puts responsibility on the shoulders of the buyer and the seller, and the holder of the sales invoice must receive an amount from the buyer, but in proforma do not create responsibility on the shoulders of the buyer and the seller.

Conclusion

In this article, we have given you explanations about “what is a pre-invoice”. Proforma is one of the most important documents in internal and international transactions and transportation, which is used in most countries. We also talked about the items included in the pre-invoice, the importance of the pre-invoice, what is the pre-invoice, etc. Click to see other articles in the field of transportation.

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