Proforma, invoice, packing list: a glossary for buying abroad
A proforma is a bill before payment, an invoice is a bill for the cargo actually shipped, a packing list is what lies in each box. One purchase in China brings two or three dozen such words. Here each is explained in a sentence or two, and the details are in separate articles.
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A proforma is a preliminary bill that the plant issues before payment. An invoice is a bill for what was actually shipped; customs calculates payments from it. A packing list is an inventory of the cargo: how many packages, what is in each, weight and dimensions. These are the three main words, but one purchase from China brings two or three dozen more. Below they are grouped by stage of the deal. Each has a short explanation and a pointer to the article with more detail.
Before the order
| Word | In plain words |
|---|---|
| Request (RFQ, inquiry) | your letter to the plant: what is needed, how much, where to |
| Quotation (offer) | the plant's answer: price, terms, production lead time, validity of the price |
| Proforma invoice (PI) | a preliminary bill before payment: items, price, delivery and payment terms, bank details |
| Specification | the list of items attached to the contract: part number, version, quantity |
| Contract | the document that binds the parties; a signed proforma sometimes replaces it |
| Sample | an item made before the lot, against which the lot is later accepted |
| MOQ, lead time, OEM | words from the plant's reply; covered in a separate article |
Terms of delivery
| Word | In plain words |
|---|---|
| Incoterms | the International Chamber of Commerce rules: where the seller hands over the goods, when the risk passes to the buyer, who pays for the road. The current edition is Incoterms 2020 |
| EXW, FCA, CPT, CIP, DAP | Incoterms rules for any mode of transport; for cargo to Uzbekistan by train or truck, choose from these |
| FOB, CIF | rules for sea transport only; for a land route using them is a common mistake |
| Place of delivery | the point named after the three letters: "FCA Urumqi, station". Without the place the rule is incomplete |
| Transfer of risk | the moment after which loss of or damage to the cargo is the buyer's concern |
Payment
| Word | In plain words |
|---|---|
| Advance payment | part of the sum before production starts |
| T/T | bank transfer |
| Letter of credit (L/C) | the buyer's bank pays the seller when the seller presents the agreed documents. The banks' rules for letters of credit are the ICC's UCP 600 |
| Payment currency | the currency in which the invoice is issued; the transfer costs depend on it |
Shipment and the road
| Word | In plain words |
|---|---|
| Invoice (commercial invoice) | a bill for the cargo shipped; customs calculates payments from it |
| Packing list | an inventory of packages: what is in which box, net and gross weight, dimensions; there is usually no price in it |
| Net and gross weight | net is the item without packaging, gross is with the box and pallet |
| Package marking | the inscriptions on the boxes; they must match the numbers in the packing list |
| SMGS consignment note | the rail transport document between countries party to the SMGS agreement, including China, Kazakhstan and Uzbekistan |
| CMR consignment note | the international road transport document under the Geneva Convention of 1956 |
| Bill of lading | the sea transport document. It confirms that the cargo was taken on board and gives the right to collect it at the port. With delivery by train or truck there is none |
| TIR (carnet) | a system in which the cargo travels in a sealed body and transit customs do not open it at every border |
| Certificate of origin | confirms the country where the item was made; issued by an authorized body of the exporting country |
Customs
| Word | In plain words |
|---|---|
| HS code | the product code under the commodity nomenclature; the first six digits are common to many countries; payments depend on it, and so does whether permits are needed |
| Customs declaration | the document by which cargo is released in Uzbekistan; filed electronically |
| Declarant, customs broker | the one who picks the code, calculates payments and files the declaration |
| Temporary storage warehouse | a warehouse under customs control where cargo waits for clearance |
| Release of goods | the customs decision after which the cargo can be collected |
| Certificate of conformity, declaration of conformity | confirm that the goods meet mandatory requirements; needed for goods on the list |
After the cargo arrives
| Word | In plain words |
|---|---|
| Acceptance report | the document of inspecting the cargo at the warehouse: packages, condition of packaging, discrepancies, signatures |
| Claim | a written demand to the seller about a defect, shortage or wrong item |
| Product passport | the document for a specific unit: model, serial number, characteristics |
| Warranty | the seller's or plant's obligation to remedy a defect within the agreed period |
| Spares kit | spare parts, tools and accessories for equipment |
How to use the glossary
The words in the tables come up in one deal in a certain order: request, quotation, proforma, contract, payment, invoice with packing list, consignment note, declaration, acceptance report. If a letter from the plant or the carrier contains a word that is not here, ask about it rather than guess. The same English word can mean different things at different companies: for example, delivery time can be either the production lead time or the time to the station.
It is better to write document names in the contract in two languages: "packing list (упаковочный лист)". This leaves less room for dispute about which document was meant.
How we do it
- The invoice, packing list and transport documents are prepared by us, not by you.
- The HS code, certificate of conformity, declaration and import permits are also on our side.
- We send what we find, with price, photos and specifications, before the order; you receive the cargo at your own warehouse.
What this article relies on
Below are the documents and materials we refer to, so that you can check what is said for yourself.
Standards and documents
Reference materials
- Wikipedia. Agreement on International Railway Freight Communications (SMGS)ru.wikipedia.org ↗
- Digitalize Trade (KTDDE). Road Consignment Note (CMR)digitalizetrade.org ↗
- IRU. TIRiru.org ↗
- Timewell. What Is a Packing List?timewell.jp ↗
- Articles in this section: on lot documents, terms of delivery, payment to the plant, the HS code and the certificate — they give the details and the primary sources.