Proforma Invoice vs Commercial Invoice

Hi all! Which of these two is more relevant and/reliable to use in export or transhipment of goods before my client issues an L/C.

Thanks

Moderator -- I moved this question here for more professional answers maybe.

Quoting from [Tony Han]:


Replying to [sabre]:

As I kown, Proforma Invoice is usually requested before opening L/C by the buyer.

Tony, as a supplier do you also forward to the buyer a pro-forma L/C?  By this I mean, "pro forma" L/C which clearly states terms and documentation requirements desired and fulfillable by you. Thus, when the original L/C document is issued, it doesn't contain any surprises.

Best regards,

Ranger

http://www.besttradesolution.com/lc/method.php#Letters%20of%20credit


chk here


Quoting from [sabre]:

Hi all! Which of these two is more relevant and/reliable to use in export or transhipment of goods before my client issues an L/C.


Thanks

Moderator -- I moved this question here for more professional answers maybe.

Quoting from [Tony Han]:


Replying to [Ranger]:

Dear Ranger,

As a buyer, when we will open an L/C to our supplier, we will give a copy of "pro forma" L/C to them to verify if there is any problem for terms and documents desired. If there is no problem, then we ask our bank to SWIFT it to our supplier's bank.

However, as a supplier, sometimes, when we get "pro forma" L/C from our buyer, and we verify it with no problem, but when we get the formal L/C from our bank, there is some differences as "pro forma" L/C so that we have to ask our buyer to amend the L/C accordingly.

I don't know why they change it when issueed.

Pro forma invoice and Pro forma LC are two different things entirely, but generally issued with the intention to serve the same purpose.

If the terms in the pro forma invoice are accepted by the buyer, the proforma invoice forms the basis for the final invoice, and is later converted to a commercial invoice - the major terms in the two remain the same.

Same with the pro forma LC. A pro forma LC is a draft, the terms of which should be examined and agreed to by you before the actual LC is issued. This process helps to avoid later amendments, costs, delays and bank charges.

Quoting from [Tony Han]:


Replying to [Ranger]:

Dear Ranger,

As a buyer, when we will open an L/C to our supplier, we will give a copy of "pro forma" L/C to them to verify if there is any problem for terms and documents desired. If there is no problem, then we ask our bank to SWIFT it to our supplier's bank.

However, as a supplier, sometimes, when we get "pro forma" L/C from our buyer, and we verify it with no problem, but when we get the formal L/C from our bank, there is some differences as "pro forma" L/C so that we have to ask our buyer to amend the L/C accordingly.

I don't know why they change it when issueed.

Tony, thats a good question.  We both know it will only cost them more money via the ammendment to change the master document especially since you had already ratified the Pro Forma LC.  Thats why UCP 600 is good in addressing the numerous issues caused by issuing banks that decide to get whimsical and over creative in their wording.

best regards,

Ranger

Quoting from [sabre]:

Hi all! Which of these two is more relevant and/reliable to use in export or transhipment of goods before my client issues an L/C.


Thanks

Moderator -- I moved this question here for more professional answers maybe.