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Pro Forma Invoice

An estimate of the cost of goods or services that a seller provides to a buyer, often used for international transactions.

A pro forma invoice is an estimate of the cost of goods or services that a seller provides to a buyer, often used for international transactions. The pro forma invoice serves as a preliminary or draft invoice, outlining the details of a potential transaction, including the quantity and price of goods or services to be provided.

Pro forma invoices are typically used in international trade to help buyers and sellers to estimate the total cost of a transaction, including any applicable taxes, duties, or fees. They can also be used to help buyers obtain financing or to obtain approvals from government agencies or other entities.

The pro forma invoice may be provided by the seller prior to the shipment of goods or provision of services, or it may be provided as a supplement to the commercial invoice after the transaction has been completed. The pro forma invoice is not a legal invoice and does not represent a formal demand for payment.

Pro forma invoices may include additional details beyond those included in a standard commercial invoice, such as a description of the goods or services, the payment terms and conditions, and any applicable shipping or insurance costs. The pro forma invoice can also serve as a communication tool between the buyer and seller, allowing them to negotiate the terms of the transaction before finalizing the sale.

Overall, pro forma invoices are a useful tool for both buyers and sellers involved in international trade, helping to clarify the terms and conditions of a potential transaction and providing an estimate of the total cost of the transaction.