When a seller sends pro-forma invoice to a potential customer, it is?
Answer Details
When a seller sends a pro-forma invoice to a potential customer, it is an indication that credit will not be granted. A pro-forma invoice is a preliminary bill of sale sent to the buyer before the actual goods are shipped or delivered. It provides an estimated cost of the goods or services, including any taxes or fees, and outlines the terms of the sale, such as payment terms, delivery date, and shipping information.
The purpose of a pro-forma invoice is to provide the buyer with an idea of the cost of the goods or services they are considering purchasing. It is not a request for payment, and the seller has not yet committed to selling the goods or services to the buyer. It is also not an indication that the seller is out of business, that the goods are out of stock, or that the seller is asking the buyer to return previously purchased goods.
Instead, a pro-forma invoice is a common practice in international trade, where buyers and sellers may not have an established relationship or credit history. By sending a pro-forma invoice, the seller can communicate their terms of sale and ensure that the buyer understands the cost and conditions of the transaction before proceeding.
In summary, a pro-forma invoice is a preliminary bill of sale sent to a potential customer to indicate the estimated cost of goods or services, including the terms of the sale. It is not a request for payment and is commonly used in international trade to establish trust and understanding between buyer and seller.