🟢 Introduction
In global trade, documentation is everything. Among the essential papers, the Proforma Invoice and Commercial Invoice play a crucial role — yet many businesses confuse them. While they may look similar, their purpose, legal power, and timing differ significantly. This article explains the differences clearly, with real-world applications and practical tips for exporters and importers.
📄 What is a Proforma Invoice?
A Proforma Invoice is a preliminary bill of sale sent to buyers before shipment or production. It’s not a demand for payment but rather a quote or offer. It’s used for customs estimates, internal approvals, and starting import processes.
🔹 Key Features:
- Not legally binding
- Sent before goods are shipped
- Helps apply for import licenses or foreign exchange
- Includes estimated prices, shipping terms, and quantities
🧾 What is a Commercial Invoice?
A Commercial Invoice is a final, legally binding document used for customs clearance and payment collection. It confirms the actual transaction after the goods are shipped.
🔹 Key Features:
- Legally enforceable
- Used by customs for duty calculations
- Required for international payments and LC (Letter of Credit)
- Includes actual price, Incoterms, and shipment details
📊 Side-by-Side Comparison Table
| Feature | Proforma Invoice | Commercial Invoice |
|---|---|---|
| Timing | Before shipment | After shipment |
| Legal Value | Not legally binding | Legally binding |
| Purpose | Quotation / Initial Offer | Final billing / Payment document |
| Customs Use | Not accepted by customs | Required for customs clearance |
| Used For | Licensing, permits, internal approval | Payments, duties, recordkeeping |
✅ When Should You Use Each?
Use Proforma Invoices:
- To quote a customer before contract
- For customs pre-approvals
- When applying for an import license
Use Commercial Invoices:
- For actual shipment & delivery
- To request payment from buyers
- For customs documentation
🌐 External Resource
For official invoice guidelines, visit:
🔗 International Chamber of Commerce (ICC)
🧠 Final Tips
✅ Always label your invoices correctly to avoid customs delays.
✅ Include HS Code, Incoterms, and detailed product descriptions in the Commercial Invoice.
✅ Train your trade team to differentiate clearly between the two.
