![]() ![]() From the Latin for “as a matter of form,” a pro forma invoice is intended to get all parties on the same page regarding the goods and services being rendered, as well as the price the buyer will be expected to pay. Instead, a pro forma invoice serves as a preliminary bill of sale.Ī pro forma invoice can be sent to a client before services are rendered or goods are delivered. Technically speaking, a pro forma invoice isn’t an invoice at all – at least not in the technical sense. In this article, we’ll take a deeper look at what proforma invoices include and how you can leverage them for your business. These documents reinforce your contract's terms of sale and can ensure mutual agreement between the buyer and the seller up to the time of delivery. ![]() It is done through sending to the consignor a statement known as account sales.Looking to streamline the sales process of your business? Consider implementing pro forma invoices. Periodically, the consignee keeps on informing the consignor about the sales made and expenses incurred by him in respect of the goods consigned to him. If the consignee finds that the goods physically match with the details and description provided in the proforma invoice, he transports them to his godown, shop or selling outlet and tries to sell them at best possible price. Upon receiving the goods and proforma invoice attached with them, the consignee performs a physical examination of the goods to see if their quantity as well as quality matches with the details laid down in the proforma invoice. ![]() The document is signed by the consignor himself or an authoritative person who, in most cases, is the sales manager. Typically, it includes the names of consignor and consignee, basic information about consignors business, quantity and quality of goods being consigned, details and description of goods and minimum acceptable sales price etc. There are no specific rules or requirements that can be followed regarding the format or presentation of information in a proforma invoice. Many international traders use consignment model of business and attach proforma invoices to their across-the-border shipments. The custom officer uses the information from proforma invoice in conjunction with the general physical examination of the goods to determine the total value of goods and the amount of imposable duty. Where goods are consigned abroad, the proforma invoice plays an important role in custom clearance. A proforma invoice, on the other hand, is not a demand for payment rather it is a memorandum invoice which tells what the actual invoice would be. It indicates seller’s demand for payment after a sale has taken place. An invoice is sent by a seller to the buyer to provide him the details of goods sold or services provided to him, price of those goods or services and the agreed terms of payment. The proforma invoice and invoice are not the same and should not be confused with each other. This document is prepared by consignor and sent to the consignee along with the goods. ![]() A proforma invoice (also written as pro forma invoice) is one of the documents used in consignment business which contains information regarding the description of goods sent on consignment and the price at which those goods can be sold by the consignee. ![]()
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