Commercial Invoice vs Proforma Invoice: Key Differences
A commercial invoice is a legally binding payment document for completed sales. A proforma invoice is a non-binding pre-sale quotation. Customs clearance requires a commercial invoice; proforma is used for pre-assessment and L/C applications.
Commercial vs Proforma Invoice
The commercial invoice and proforma invoice are the two most common invoice types in international trade. Despite similar formats, they serve fundamentally different purposes and carry different legal weight.
Key Differences
| Criteria | Commercial Invoice | Proforma Invoice |
|---|---|---|
| Timing | After sale/before shipment | Before sale (quotation stage) |
| Legal status | Binding payment document | Non-binding quotation |
| Accounting | Formal record required | No accounting entry |
| Customs | Duty calculation, declaration | Pre-assessment, permits |
| L/C | Payment document | Opening application |
| Heading | "Commercial Invoice" | "Proforma Invoice" |
When Is Each Used?
Commercial Invoice Required For
- Customs declarations (mandatory)
- Customs value determination
- L/C payment presentation
- Accounting records
- Tax reporting
Proforma Invoice Used For
- Price quotation to buyer
- L/C opening application
- Import permit applications
- Currency transfer authorization
- Customs pre-assessment
Frequently Asked Questions
Can customs clearance use a proforma?
No. Customs declarations require the commercial invoice.
Can prices differ between proforma and commercial?
Yes, since proforma is non-binding. For L/C transactions, consistency is important.
Is every export required to have a commercial invoice?
Yes, for all customs declarations.
Which language?
English is standard for international trade. Some countries require local language translations.
References
- ICC Trade Documentation
- UCP 600
- World Customs Organization
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