1. The difference in one line
A proforma invoice is a quotation in invoice form, issued before the sale.
A commercial invoice is the bill for goods actually sold and shipped.
2. The proforma invoice
Issued by the seller before the transaction is confirmed.
Purpose:
To state the price and terms being offered.
To enable the buyer to obtain an import licence, open a letter of credit or apply for foreign exchange.
To accompany a sample shipment.
To support a tender or a preliminary customs estimate.
The proforma is not a demand for payment in the ordinary sense, though many sellers require payment against it.
3. The commercial invoice
Issued when the goods are shipped.
It is the accounting document, the customs valuation document, and the document against which payment is made.
It references the actual quantity shipped, which may differ from the proforma.
4. Where the difference causes problems
Customs using the proforma as the valuation document
Where the proforma is submitted with the entry, the customs authority values against it, and a subsequent commercial invoice at a different price produces a query.
A letter of credit opened against the proforma
Where the credit’s terms are drawn from the proforma, and the commercial invoice later differs slightly, the credit may not cover the difference.
The buyer’s import licence based on the proforma
Where the licence covers the proforma value and the actual shipment exceeds it, the entry is refused.
5. When each is used
Proforma
Quotation.
Import licence application.
Letter of credit opening.
Sample shipments.
Tender submissions.
Preliminary customs inquiries.
Commercial invoice
The actual shipment.
Payment.
Customs valuation at import.
Legalization, where required.
6. The legalization question
A proforma invoice is sometimes legalized for tender or licensing purposes.
Where it is, the legalized document fixes the price for the purpose it was legalized for, and the commercial invoice issued later must be consistent with it or the difference explained.
7. The sample shipment case
Sample shipments are often accompanied by a proforma invoice marked “no commercial value” or with a nominal value.
Where the destination customs authority disagrees with the nominal value, it assesses its own.
8. Common errors
Submitting a proforma with the customs entry
The valuation is based on the wrong document.
Credit terms drawn from the proforma without margin
Slight differences produce discrepancies.
Import licence value below the actual shipment
Entry refused.
Proforma legalized and the commercial invoice differing
Inconsistency.
No clear labelling
A proforma not marked as such causes confusion at the destination.
9. The labelling discipline
Mark the document clearly: PROFORMA INVOICE or COMMERCIAL INVOICE.
The label determines how the document is read.
10. Closing view
The two documents serve different stages of the transaction, and the problems come from using one where the other is required.
The labelling is trivial and prevents most of the confusion.
*This article is based on standard international trade documentary practice. Exporters should confirm specific requirements with their buyer and clearing agent.*