Curriculum
International Trade & Shipping Documentation
Module 1: Introduction to International Trade & Shipping
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Module 2: Fulfillment & Commercial Documents
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Module 3: Shipping & Transport Documents
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Module 4: Regulatory & Compliance Documents
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Module 5: Financial & Payment Documents
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Module 6: Case Studies
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Module 7: Final Test
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Text lesson
Proforma Invoice
A Proforma Invoice is a preliminary invoice sent by a seller to a potential buyer. It outlines the goods or services to be provided and their estimated costs. It’s important to note that a Proforma Invoice is not a legally binding document, and it does not require payment. It serves as a quotation or an offer for goods or services.
Key Information on a Proforma Invoice:
- Seller and Buyer Information: Names and addresses of the seller (supplier) and buyer (potential purchaser).
- Description of Goods or Services: Detailed descriptions of the items or services offered, including quantities, unit prices, and any applicable specifications.
- Total Cost: The Proforma Invoice includes a breakdown of costs, such as itemized prices, shipping charges, taxes, and other fees.
- Payment Terms: While not a demand for payment, it may outline payment terms or expectations, such as when payment should be made and the accepted methods of payment.
- Validity Period: Some Proforma Invoices specify a time frame within which the offer is valid.
- Shipping Information: If applicable, it may contain information about the shipment, such as delivery terms and expected shipping dates.
Purpose:
- Quotation: A Proforma Invoice is often used to provide a prospective buyer with a cost estimate before a transaction is finalized.
- Letter of Credit (L/C): In some cases, it may be used to initiate the process of opening a letter of credit, which is a financial instrument used in international trade.
- Internal Record: Companies often use Proforma Invoices for internal record-keeping and to track sales opportunities.
- License Application: In some countries, proforma invoices can be used to apply for specific import licenses.
- Legally Non-Binding: It’s not legally binding, as it functions as a provisional document outlining estimated costs before a transaction, providing a basis for negotiation without establishing contractual obligations.
Key Takeaway: A Proforma Invoice is a versatile tool in international trade, offering cost estimates, initiating letter of credit processes, supporting record-keeping, and aiding in import license applications.