Demystifying Commercial Invoice vs. Pro Forma Invoice in International Trade

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In this video, we discussed the difference between a commercial invoice and a pro forma invoice in the context of customs brokerage. A commercial invoice is a legally binding document issued after the completion of a transaction, providing essential information about the shipment and serving as proof of the transaction. Its purposes include determining import duties and taxes, matching declared value with actual value, identifying regulations or restrictions, and facilitating payment between buyer and seller. On the other hand, a pro forma invoice is a preliminary document issued before the transaction is finalized, serving as a quotation or cost estimate. Its purposes include facilitating negotiations, providing a breakdown of costs, securing contracts, and arranging payment terms. Key differences between the two invoices include legality, timing, payment requirement, and accounting use. Understanding these differences is crucial for customs brokers to ensure smooth and compliant importation processes.
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Video Disclaimer Here: This video is designed for education and is unaffiliated with US government bodies.

00:26 What is a Commercial Invoice?
00:57 Purpose of a Commercial Invoice
01:34 What is a Pro Forma Invoice?
02:06 Purpose of a Pro Forma Invoice
02:42 Key Differences between Commercial Invoice and Pro Forma Invoice