The pro forma invoice is a preliminary document given to the importer prior to the purchasing and importation of the goods. This document serves as an estimate.

How to get a commercial and pro forma invoice?

Both commercial invoices and pro formas are issued by the seller of goods.

Login

Call:

855-912-0406

Commercial Invoice vs Pro Forma: A Guide for Importers

Q: When do you need a pro forma?

Pro forma documents are typically not required. However, you will need them in some situations such as if your goods require a license or if you’re using a letter of credit.

Q: What is a commercial invoice?

Commercial invoices tell the buyer how much the items that they want to import will cost. The cost listed is the final amount for the goods.

A commercial invoice with different vehicles on it, an aircraft flying above, a shield, some coins, and a map of the globe in the background

Commercial invoices and pro formas are two documents you’ll need to understand when you import goods from overseas. Our guide will show you how they work and how to fill them out. 

By

Jacob Lee

January 7, 2022

Last Modified:
September 25, 2024

Share This Article

While the commercial and the pro forma invoices might seem similar to one another, they’re unique pieces of paperwork used for different purposes. You’ll need to have a thorough understanding on how they work before you start bringing goods into the country.

Key takeaways

A pro forma invoice is given by an exporter to an importer before goods are purchased.
Pro formas are typically used for budgeting and negotiation between each party involved in the sale
Commercial invoices are issued by exporters to importers after the details of an international transaction has been agreed upon.
Commercial invoices serve as a legal record of the transaction and are used by importers for accounting purposes.

In our guide below, we will discuss further details about each document, their differences, and how important they are for importing.

What Is A Pro Forma?

The pro forma invoice is a document given by an exporter to an importer prior to the purchase of goods or services. It provides a cost estimate on the products and outlines the terms and conditions of the sale.

You can find the following information on a pro forma:

Date of issue
Contact information for the buyer and seller
Description of the goods and services
The amount due for the goods
Value-added tax (VAT)
Quantity and quality of products
Weights and dimensions of quoted products
Delivery method
Estimated shipping date
Terms of payment

Importers and exporters use the pro forma to negotiate various aspects of the sale before the purchase is finalized. From there, you can figure how much money you need to budget for the products you’ll be purchasing.

When Do You Need A Pro Forma?

A Pro forma might be required under specific circumstances. I’ve listed the potential scenarios when you’ll need the document.

Applying for an import license
Contracting for pre-shipment inspection
Opening a letter of credit
Transferring hard currency

Even if a pro forma invoice isn’t required, it may have information that you’ll need to provide on other import documents. Therefore, it’s best to always obtain this piece of paperwork just in case you need to look back on it.

Pro forma documents are also frequently used by businesses that import products in bulk. If you import goods in large volumes, then you should definitely use this document.

What Is A Commercial Invoice?

The commercial invoice tells how much an importer will need to pay after a purchase has been finalized. As a result, the document serves as a sales contract and legally binding agreement between you and the seller.

Like the pro forma, this document will be issued by the exporter of your products. While both pieces of paperwork contain much of the same information, commercial invoices may also include the agreed upon Incoterms® for your shipment.

Commercial invoices are the most commonly used document in international trade and are necessary to accurately account for the value of products entering the U.S.

The graphic shows the value of imported goods to the U.S. from 2018 to 2022. The first bar is dark blue and shows the U.S. imported $2.64 trillion in 2018. The second bar is red and shows the U.S. imported $2.67 trillion in 2019. The third bar is blueish-grey and shows the U.S. imported $2.42 trillion in 2020. The fourth bar is light-purple and shows the U.S. imported $2.8 trillion in 2021. The fifth bar is cobalt blue and shows the U.S. imported $3.35 trillion in 2022.

Without standardized commercial invoices, tables like the one here cannot be created and values would be harder to track. This is why each import must be accompanied by a commercial invoice.

You won’t be the only person that uses this document when you bring goods into the country. Commercial invoices are required by various entities involved in the import process.

This includes:

Customs brokers and freight forwarders
U.S. and foreign Customs officials
Marine insurance companies
Importer and exporter’s bank

Accurately filling out the commercial invoice is imperative to get your shipment on time and avoid long shipping delays.

Putting inaccurate information could also result with you paying the wrong duty rate. This means that you could be overpaying or underpaying the duty of your import.

Related: Foreign Importer of Record

When Do You Need A Commercial Invoice?

According to the International Trade Administration (ITA) commercial invoices are always required when importing goods into the United States. The exporter and importer each need to have a copy so that products can be cleared by their respective customs officials.

They’ll also use the commercial invoice to determine and apply the correct duty rates on your imported goods. Importers in particular can use the document for tax and accounting purposes to keep track of their sales revenue.

How Do You Submit Commercial Invoices?

Commercial invoices will need to be sent to CBP while a physical copy travels with your import. You’ll need to access CBP’s Automated Commercial Environment (ACE) to send the document electronically.

Once inside ACE, you can use the Document Image System (DIS) to submit your commercial invoice and other documents related to your import. They should all be in a PDF, JPEG, or other electronic format.

The exporter of your products will be responsible for including a physical copy of your commercial invoice with the shipment. Any partner government agencies involved may require this document as well.

This includes:

Food and Drug Administration (FDA)
Animal and Plant Health Inspection Service (APHIS)
Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF)
Fish and Wildlife Service (FWS)

Each of these agencies have their own trade processing systems where you can submit the document electronically. If you are unable to produce a commercial invoice, a pro forma invoice is acceptable by CBP.

Differences Between a Commercial Invoice and Pro Forma

If you’re still struggling to understand how these documents work, then have no fear. I’ve provided a graphic that will help you visualize the variations between a commercial invoice and pro forma.

The graphic displays the different features of commercial and pro forma invoices using check marks and x marks.

As the graphic shows, the only feature these documents have in common is that they’re issued by the exporter. It’s important to keep these variations in mind when importing to ensure you don’t misuse either document.

USA Customs Clearance Can Help You With Commercial and Pro Forma Invoices

If you’re having trouble figuring which customs documents your import should have, then USA Customs Clearance can help. Our Licensed Customs Brokers and import specialists can assist you with identifying the required paperwork for your goods. They’ll also show you to fill them out and show you where they have to be sent.

We also offer other import services that you can use:

Import/Customs Consulting: Meet with one of our Licensed Customs Brokers to discuss which documents you need and other requirements you’ll need to fulfill.
Customs Bond and Brokerage Services: A bond is required for all imports that have a value of $2,500.
Bundles for New Importers: If you’re new to importing, and you’re not sure what to do, then use one of our bundles to learn the basics.

Get the assistance you deserve with USA Customs Clearance. Start with one of our services or call our team at (855) 912-0406 if you’re ready to get started.