Difference between Purchase Order and Commercial Invoice

 

The information provided here is part of Online Export Import course 

This article is a part of series of replies on questions asked by beginners (among beginners) relates to basic information on export and import trade.

How to differentiate commercial invoice with Purchase order?

What is Purchase order and how does Purchase order work?

Purchase order is a document prepared by buyer to seller containing the details of order with description of goods, price, terms of delivery, terms of payment and other terms and conditions mutually agreed by buyer and seller prioDifference between Purchase Order and Commercial Invoice copy r to issue of such document. Pro forma Invoice is nothing but a commitment of sale by seller as binding agreement with buyer with the terms and conditions of sale agreement. Usually, purchase order is sent after collecting a proforma invoice from seller.

 

Now let us discuss about commercial Invoice. What is commercial Invoice and how does commercial invoice work?

Commercial Invoice is prepared by seller based on the purchase order issued by buyer. Normally Commercial invoice is issued at the time of effecting shipment. Commercial Invoice contains details of buyer, seller, order number, details of product, quantity, price, terms of delivery, terms of payment an other details of contract as mutually agreed by buyer and seller. (Please read my article about contents of Invoice in same web blog).

In a nutshell, major difference between a purchase order and commercial invoice is that a purchase order is issued by buyer where as Invoice is prepared by seller. Purchase order is an offer of contract of sale where Invoice is a document of confirmation of sale. Purchase order can be one document covering all part shipments. However, Invoice is prepared under each shipment separately. 

Also read

Difference between Pro forma Invoice and Commercial Invoice in Export Import Trade. Do pro-forma invoice accepts for import customs clearance? 

I hope, I could differentiate purchase order and commercial invoice in simple terms to make you understand easily.  What is your experience in handling purchase order and commercial Invoice? Would you like to add more information about purchase order and commercial invoice?  Share your experience below about the difference between purchase order and commercial invoice.

 

The above information is a part of Export Import Online Tutorial

 Posts about international trade cauching 

Difference between LC expiry and shipment date expiry

What is Terms of Delivery in Imports and exports

Terms of Payment in Export and Import

Mode of payments in international trade

Difference between Demurrage and Detention in import

How to start Export Business?

How to get Export Orders?

What are the risks and solutions in Export Business?

Click here to know India Trade Classification(ITC)

Click here to know HS code of other product/commodity

Service Tax - Click here to read complete notification under Budget 2014

What is Bank post shipment credit to exporters?

Types of export containers
Measurement of export containers
Export Import Policy of India 2015-20
MEIS, Merchandise Exports from India Scheme
SEIS, Service Exports from India Scheme
Merge your Commercial Invoice and Packing List for all your future exports
Export procedures and documentation

 Why do carriers balance weight and volume while charging freight amount in Exports?
 
Why does Palletization require?
 
Why labeling and marking in Export business?
The term FCL. What is FCL means
The term LCL. What does LCL mean?
 Tips to exporters on Documentation
How does First Appraisement system of import customs clearance procedures work?
 How does Letter of Credit work?
 
How does STP units work in India?
 
How does TT (Telegraphic Transfer) work?
Transferability of Bill of Lading
Transhipment - A redefinition        
Travelers to India under import duty exemption, Frequently Asked Questions Part 2
Triangular shipment
 Types of Insurance Documents.
 How does Wire transfer work in international business?
 How is assessable value calculated by customs for imports?
 
How is IGM filed under high sea sale?
 How many of you know the meaning of Exports and Imports in India?
 How many types of imports in India. Types of bills of Entry in India

How many types of shipping bills in export

 How to add Line number in Import General Manifest in Custom in India

How to amend AWB number in Import General Manifest (IGM)

GST rate for made up textile articles, clothing and worn textiles, sets

GST amount rate on Blankets and travelling rugs

GST rate on Bed linen, Toilet linen and kitchen linen

GST tariff rate on sale or purchase of Curtains and interior blinds, bed valances

GST amount of rate on Bedspreads, Counterpanes, Napkins, Pillow case and pillow slip, Table cloth and table cover

GST slab rate on purchase or sale Tarpaulins, awnings and sun blinds, tents

GST percentage on Floor-cloths, dishcloths, Life-jackets business

GST taxable rate on sale or purchase of Rags, scrap twine

GST rate on Blankets and travelling rugs




Comments


SESH IYENGAR: Hi. I am from Pune. I find your website immensely invaluable for the knowledge you are imparting. It is indeed generous of you to share your experience.

Ramakrishna Prasad. K: Hi.. I find tour website very helpful in clarifying the day-to-day issues we face, in simplified terms. The content very practical and explained without any complications. I do appreciate the efforts and continue to do well, in the same spirit. Regards, Ramakrishna Prasad. K

SALMA AKRAM: hi:this was very usefull to me becouse its my first time learning about clearing thnk you

asim: dear sir, i have a question to u i hoope u will give the answer of my question clearly and briefly stepwise my question is that how to issue the d/0 from import climaz i will be waiting ur reply

Neetu Bansal: I have a 30 pcs. handbag shipment to go to spain & the value is less than 500 euro. The party is asking for GSP certificate, can we avoid this certificate or can we write it on our letterhead that the goods are made in India.

Admin: Hello Neetu Bansal, You may read the post in this article about HOW TO OBTAIN GSP CERTIFICATE

Abubakar: I find this platform very educative because, I leaned a lot. pls I want to know more on Right of Consigner on Airway Bill.

Mr Thành: Hi I'm Thanh from Vietnam, you guys need to support, feeling free contact me

Discussion Forum

You can also share your thoughts about this article.
Any one can answer on question posted by Readers