why proforma needed in export sales

[Former Member]

Gurus.

I have seen 2 scenerios where we create a proforma invoice.

1) in case of plant to plant stock transfer

2)in case of exports sale.

can anyone tell me the reason behind why is it that necessary to have a proforma invoice in case of exports sales?

is there any other cases where we need proforma invoices?

[Former Member · Accepted solution]

Dear Shiva,

The scenario in which proforma is created for order may be Export scenario & service scenario (No delivery created in service scenario), similarly for delivery related scenario, we will opt for F8, which is Proforma Invoice for service and F5 - is Proforma invoice for Order.

The benefit of Proforma Invoice is that no accounting document is generated for the same. Proforma Invoice for same order & delivery can be created 'n' number of times & if created more than once, we need not cancel the same as it is a dummy document.

Proforma Invoice is created in the following cases-

1. In Stock Transfer (Intra Company)

2. Sample sale

3. Consignment

4. Exports

Proforma Invoice is produced at the customes clearing and taking prior approvals for shipments. During Exports , Proforma Invoice is sent to customer , so that they can be prepared for the shipment arrival .

If Proforma is required for some business requirement then create proforma invoice followed by excise invoice then pass JV through finance for excise entry in customer accounts.

Best Regards,

Amit

[Former Member]

can others have any more scenarios for this

[Lakshmipathi]

Dear Shiva

It is not mandatory that in exports, you should generate proforma. You can also generate commercial invoice but it should have "Posting Block" in VOFA. This means, accounting document will not be generated as and when you generate commercial invoice and hence, no accounting impact on this.

This is due to the fact that in exports, the moment you despatch the goods from the plant that will not be considered as sales; but only the date on which, when the Bill of Lading is received will be considered as sales. So you have to release the blocked invoice manually to accounting once you receive the Bill of Lading and now only, it will be treated as sales.

That is why in most of the companies, they generate proformas

thanks

G. Lakshmipathi