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

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Comments


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