Commercial Invoice vs Proforma Invoice: What’s the Difference in Exports?

 International trade is a world full of the paper work. Two documents that leave exporters and importers baffled in most cases are commercial invoices and proforma invoices; which are part of the essential documents.

The two are involved in the exportation processes- but they vary much in what they accomplish, when they do this, and whether they are legal or not. This article from EximPe describes the difference between commercial and proforma invoices, it describes their usage along with a good example of what they should look like.

What is a Proforma Invoice?

A proforma invoice can be described as Pre-bill of sale or a non-binding quotation sent by the seller to the buyer prior to the goods being shipped. It is neither an invoice of a final payment, but it is a promise to sell the goods at a particular price and on some specified conditions.

You can imagine it like a quite detailed estimate or a proposal. The main reason behind establishing it is to provide the buyer with a clear image of what they are about to order in terms of cost of goods, approximate shipping charges among other charges.

Key Characteristics of a Proforma Invoice:

  • Pre-shipment Document: Always created and sent before the goods leave the seller’s premises.
  • Not a Demand for Payment: It serves as a quote and does not create a legally enforceable obligation for the buyer to pay until they accept the terms.
  • Used for Planning: The buyer uses the proforma invoice to arrange financing (e.g., open a Letter of Credit), obtain an import license, apply for a loan, or estimate import duties and taxes.
  • Subject to Change: The details on a proforma invoice, especially related to shipping costs and Incoterms, can change and are finalized in the commercial invoice.

A well-structured proforma invoice format for export includes all the key details you would find on a commercial invoice but is clearly marked as "Proforma Invoice."

What is a Commercial Invoice for Export?

An export commercial invoice will be the last bill of sale that is legally binding by the seller to the buyer once the product has been delivered. It is a Customs clearance official document and it is a formal demand that payment will be made.

The commercial invoice is document of the actual sales and which should be a true reflection of the goods, their prices and term of the sale as it was performed.

Key Characteristics of a Commercial Invoice:

  • Post-shipment Document: Created and sent to the buyer after the goods have been shipped.
  • Demand for Payment: It is a legal request for payment from the buyer for the goods supplied.
  • Mandatory for Customs: It is the most critical document for customs officials in the importing country to assess duties, taxes, and tariffs.
  • Final & Legally Binding: The values and terms listed on the commercial invoice are final and legally binding. They should not be changed once the invoice is issued.

Commercial Invoice vs Proforma Invoice: A Side-by-Side Comparison

To clarify the distinction, here is a detailed table comparing the two invoices based on key parameters. This is the ultimate guide to understanding the ifsc and swift code differences.

Export Invoice Format Examples

 Proforma Invoice Format for Export

Exporter: ABC Pvt. Ltd. Importer: Global Buyers Inc. Invoice Type: Proforma Date: June 15, 2025 Goods: Steel Sheets HS Code: 7208 Quantity: 10,000 kg Price: $0.65 per kg Total: $6,500 Incoterms: CIF Hamburg Currency: USD Validity: 15 days Payment Terms: 50% advance

Commercial Invoice Format for Export

Exporter: ABC Pvt. Ltd. Importer: Global Buyers Inc. Invoice No: CI-2025/034 Date: June 20, 2025 Goods: Steel Sheets HS Code: 7208 Quantity: 10,000 kg Unit Price: $0.65 Total Amount: $6,500 Currency: USD Payment Terms: As agreed (50% advance, 50% on delivery) Incoterms: CIF Hamburg Mode of Shipment: Sea Country of Origin: India Authorized Signature: [Digital Seal]

When Should You Use Each Invoice?

Use a Proforma Invoice when:

  • Quoting a price before a sale is finalized
  • Importer needs a document for government clearance or bank processes
  • Exporter is applying for export permits

Use a Commercial Invoice when:

  • The sale is confirmed
  • Goods are shipped or about to be shipped
  • Customs or banks request final documents

Why Accuracy Matters in Export Invoices

Any mismatch between the commercial invoice, shipping bill, bill of lading, and other documents can result in:

  • Customs delays
  • Payment holds
  • Legal disputes

Conclusion

An exporter should have knowledge about the distinction between a proforma invoice and a commercial invoice. Although both have relatively the same fields, their objective, schedule and legal authority is different.

An invoice is important and you should always use the right invoice at the right time to avoid delays in shipment, payment or compliance.

With tools like the Eximpe Invoice Generator, you can confidently create both proforma and commercial invoices that are export-compliant, error-free, and ready for global business.

FAQs: Commercial vs Proforma Invoice

1. Is a proforma invoice legally binding?

No, a proforma invoice is not legally binding. It's a quote or estimate that outlines the terms of sale but doesn’t demand payment.

2. Can I use a proforma invoice for customs clearance?

Some countries allow temporary clearance or pre-approval using a proforma invoice, but final clearance always requires a commercial invoice.

3. What happens if the final commercial invoice differs from the proforma invoice?

Minor changes are acceptable, but major discrepancies may raise red flags with customs or cause L/C disputes. Always update the buyer in advance.

4. Do I need both invoices in every export deal?

Not always. If you’re directly shipping without a prior quotation, you can start with just a commercial invoice.

5. Are proforma invoices used for GST or taxation?

No. Only commercial invoices are used for GST calculations, tax reporting, and input credit claims.

6. Can Eximpe generate both types of invoices?

Yes. The Eximpe Invoice Generator supports both proforma and commercial invoice templates, with export-ready formats and fields.

7. What is the difference in format between a commercial invoice and proforma invoice?

The core structure is similar, but proforma invoices may lack certain mandatory fields like HS code, Incoterms, or tax info, which are essential in a commercial invoice.

8. Can I revise a commercial invoice after it’s issued?

Only through a credit note or replacement invoice, especially if already submitted to customs or the bank.

9. Is it necessary to include Incoterms in both invoice types?

It’s optional in proforma invoices but mandatory in commercial invoices for legal and shipping clarity.

10. Does invoice numbering differ between the two types?

Yes. Best practice is to use separate numbering sequences to track and manage both types accurately.

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