Letters of Credit

Getting Paid Under

An Irrevocable Documentary Credit

Karen Dunlap
Dunlap International, Inc.
Letter
Governed by
of Credit UCP 500
Summary of a contract
between seller and
buyer with the bank(s)
as referee.
 The Beginning:
An Offer and an Acceptance

• Formal Contract
• Seller’s Quotation/
Proforma Invoice and
Buyer’s Purchase Order
• Order placed over the
internet
 PROFORMA INVOICE
Critical First Step
 A PROFORMA INVOICE is an invoice provided by a
supplier prior to the shipment of merchandise,
informing the buyer of the kinds and quantities of
goods to be sent, their value, and important
specifications (payment terms, time of shipment,
weights and dimensions, shipping terms, etc.).
 Essentially the proforma invoice is a quotation laid out
in the format of your proposed billing invoice
summarizing the key terms of your sales contract .
When is a Proforma Invoice required?
1. To enable the Buyer to open a
Letter of Credit.
2.To enable the Buyer to obtain
an Import License (and foreign
currency exchange).
A Proforma is useful anytime
you need to communicate your
expectations clearly!