Quotation against proforma invoice
Both documents put a price on goods before anything ships, and many businesses use the two words to mean the same thing. They are not the same. The difference matters most when a buyer treats one of them as binding.
Send a quotation to start a discussion about price. Send a proforma when the buyer needs a formal document to act on, for example to open a letter of credit, apply for an import licence or release funds. Be aware that a proforma is close to an offer.
| Quotation | Proforma Invoice | |
|---|---|---|
| Purpose | Price an enquiry. | Give the buyer something to act on. |
| Commitment | An indication, unless it says otherwise. | Usually treated as an offer. |
| Bank use | Rarely accepted. | What a letter of credit is opened against. |
| Import licence | Generally not accepted. | Commonly required. |
| Format | Free. Prose is fine. | Invoice layout, with reference and totals. |
| Next document | A proforma, or a purchase order. | A commercial invoice once shipped. |
Put a validity date on both
A quotation without an expiry date may stay open indefinitely while your costs change. Thirty days is the common default, and it is the cheapest protection on either document. Say what happens if raw material prices or freight rates change within that period, especially on a long lead time.
Where the sequence usually runs
The usual chain is: request for quotation, quotation, purchase order, sales confirmation. The proforma fits in where the buyer needs a formal document before raising the order. On smaller deals the proforma often replaces the quotation completely. That is fine, as long as you know you have skipped the non-binding step.
A priced offer to supply, stating validity, lead time and the Incoterms the price is quoted on.
A binding quotation in invoice form, issued before shipment so the buyer can open a letter of credit or arrange an import licence.
+Can a quotation become a contract?
It can, if it is specific enough and the buyer accepts it without conditions. To stay in control, mark it clearly as an indication and not a firm offer, and state a validity period.
+Which do I send with a sample shipment?
A proforma. Samples still need a value for customs even when supplied free of charge, and a quotation will not clear them.
Try it with a real shipment.
The generator on this page is the real product. Fill it in, download the PDF, and see if it is what you need.
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