Terminology for bough touts items 1) Enquiry data sheet 2) Prepared Indent 3) Receipt of Technical offer & commercial

minimum three offer 4) Making technical & commercial evaluation with comparison. 5) Selection of one vendor with proper credential 6) Placing LOI (letter of indent). 7) Receipt of final data from vendor.& communication for QAP 8) Placement of PO 9) Letter of credit / Performa invoice / bank guarantee. 10) Follow up for vendor supply. 11) Inspection call from vendor. 12) Inspection of material. 13) Material inspection clearance certificate / Material dispatch clearance certificate 14) Transport of material from vendor shop to destination.( lorry receipt-LR ) 15) Invoicing.

What is letter of credit It is an official letter issued by a bank authorizing a person or company to take money from another bank. A simple example will explain it clearly. Suppose A in India wants to buy material from B in Japan. A will open a Letter of Credit in favour of B. B will ship the materials and send copy of the documents to A's Bank. When A accepts the documents from the Bank, the Bank will make payment to B's Bank thus completing the payment for the materials. The advantage here is that shipping documents sent to A's bank is proof of shipping the material and acceptance of documents by A is guarantee for payment for the materials. Thus both parties to the deal is protected.

Proforma Invoice

invoice

A Proforma invoice is an invoice provided by a supplier in advance of providing the goods or service. A quotation in the form of an invoice prepared by the seller that details items which would appear on a commercial invoice if an order results. Proforma invoices basically contain much of the same information as the formal quotation, and in many cases can be used in place of one. It should give the buyer as much information about the order as possible so arrangements can be made efficiently. The invoices inform the buyer and the appropriate import government authorities details of the future shipment; changes should not be made without the buyers consent. As mentioned for the quotation, the points to be included in the proforma are: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Sellers name and address Buyers name and address Buyers reference Items quoted Prices of items: per unit and extended totals Weights and dimensions of quoted products Discounts, if applicable Terms of sale or Incoterm used (include delivery point) Terms of payment Estimated shipping date Validity date

When a buyer asks for a quotation the seller should always provide a pro-forma invoice. A proforma invoice is an invoice sent in advance of the commercial invoice, which is the final bill that the buyer agrees to pay. Some of the advantages of pro-forma invoice to the importer include to show to his government for foreign currency allocation, opening letters of credit and most importantly, to have a detailed information on the transaction that can help him plan. An accurate and professionally submitted pro forma-invoice can help buyers to make