WHAT IS A PROFORMA INVOICE IN NIGERIAN CONTEXT?

WHAT IS A PROFORMA INVOICE IN NIGERIAN CONTEXT?

WHAT IS A PROFORMA INVOICE?Many people in the international logistics trade tend to interchange proforma invoice for commercial invoice. In real sense however, both invoices are different at least in purpose. Therefore, this article will define what proforma invoice is. Furthermore, the article will show how to make a proforma invoice. Finally, the article will reveal essential content of a proforma invoice in Nigeria. Hence, we will focus on what makes the proforma invoice acceptable for Form M in Nigeria.

WHAT IS A PROFORMA INVOICE?

To give this question a sharper focus, we could put it this way; what is a proforma invoice in the international trade? A proforma invoice is a document issued by the seller or supplier of goods, to the buyer. The invoice contain quotes or estimated detail of goods of interest. It is a rough estimate of the real invoice, and comes before importation. The purpose of the proforma invoice in Nigerian importation business is to enable the buyer obtain Form M with the Nigerian Customs and the Central Bank of Nigeria.

Read Also: FORM M NIGERIA: HOW TO PROCESS AND OBTAIN IT

WHAT IS A PROFORMA INVOICE IN NIGERIA?   

Copy and paste the below sample showing single item on the exporters letterhead paper. You can edit by entering the applicable data and figures, stamp and revert to us.

WHAT IS A PROFORMA INVOICE TEMPLATE

Consignee:

 

Contact address, email, phone number, contact person, etc.

 Exporter:

 

Include all shipper detail including contact person and email, etc.

Item/Part #Description/HS CodeUnit Price (USD)Quantity/PCLine Total (USD)
1Internal Pneumatic Line-Up Clamp (16″-18″) with self-propel

 

Dimensions 2840 x 600 x 720 mm x 3 (300 Kg Each)

HSCODE: 8479.89.00

28,668.35386005.05
 Certification Charges  800.00
 Packaging Cost  1750.00
Special notes and terms of sale:
Package: Brown Box

 

Delivery time: Around 5 days after payment is received.

Terms of Payment: 30% with PO.

Shipping Terms: CPT

Country of origin of goods: China,

Country of supply of goods: China,

Port of loading: China

Port of delivery: Murtala Mohammed Lagos Nigeria.

Subtotal86005.05
Freight cost (to MM Lagos)6500.00
Ancillary Charges2250.00
  
Total C&F95055.05

WHAT IS A PROFORMA INVOICE?; CONTENT OF THE PROFORMA INVOICE 

As applied to the Nigerian import and export trade, a proforma invoice must have certain contents to be acceptable by the Customs Authority for Form M issuance. Let us take a closer look at those contents.

Supplier’s Addresses and Contact Detail (consignor’s address/contact):

The pro forma invoice must contain the address of the seller, supplier or exporter, depending on who is responsible at the country of supply. Additionally, the invoice shows other means of reaching the supplier. Consequently, the email address, phone number, fax, website, contact person, etc. should be on the invoice as well.

IMPORTING OR EXPORTING TO NIGERIA?
-PRICE VERIFICATION SYSTEM (PVS)
-SON PC/SONCAP PROCESSING
-FORM M AND PAAR PROCESSING
-INVOICE, CCVO, PACKING LIST, AND OTHER DOCS
-PICKUP AND SHIPPING
-SEAFRIEGHT CLEARANCE AND DELIVERY TO FINAL DESTINATION
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Buyer Or Receiver’s Address and Contact Detail (consignee’s address/contact):

The pro forma invoice must contain the address of the buyer or receiver, depending on who is responsible at the destination country. Other means of reaching the buyer; such as the email address, phone number, fax, website, contact person, etc. may be stated on the pro forma invoice. It is important that the buyer’s detail agree with what is on his page at the single window for trade.

Invoice Number:

The invoice must contain a unique number that differentiates it from all other invoices. This could be just numbers like ‘12344’ or a combination of numbers and alphabets like ‘ABC1235’ or an alphanumeric and symbols like ‘VAG123#’ or just any code.

Invoice Date:

The invoice must have dates in an understandable way; e.g., 5/4/2018 is 5 April 2018. Alternatively, you could write in words as 5 April 2018. Only remember that Nigeria systems uses day, month and year order, so that a/b/c means day a, month b, year c.

Products or Items Description:

Describe each item in the pro forma invoice in terms of its trade name, intended use, model, or any other useful information. Thus, allowing for ease of categorization into trade group. Some items could be described in just simple expression like ‘240V Lithium Battery’ while others may require long sentence description. E.g., ‘Galvanized wire mesh 2×1.9MM’ failure to describe an item clearly or giving it a wrong description may hinder Form M processing. For instance, an item may not be a prohibited item in Nigeria, but the description could be. So make so to capture your item properly for what it is.

General Description of Items/Shipment:

In a case where you have more than one item in the invoice, use a general expression to describe the shipment itself. For, example, you could state the use of the entire goods – ‘Safety and protective equipment for use on-board.’

HS Codes:

This stands for harmonized system codes and is a kind of codes used in trade internationally to identify goods or classes of items. You may look up more here.

Packages and Type:

State the packages were applicable. E.g., an item could be 6 packages and the type of packing is dozens.

Quantity of Items:

This is required to enable quick check of total amount of items.

Unit Price and Total Amount:

Equally, state the unit price for each item and the total amount for each item.

Ancillary Charges:

These are costs not of the items itself, but for auxiliary services such as local transportation at origin or packing. This must be stated were it applies.

Country of Origin:

This must be stated for each item.

Country of Supply:

This must be stated for the entire shipment. Origin country may not be supply country because goods are not always bought from where they were made.

  1. Origin Port: this must be stated in the invoice.
  2. Destination Country: mention Nigeria for instance.
  3. Mode of Transport: state whether road or air or sea.
  4. Arrival or Destination Port: state this, e.g. Port Harcourt Airport or Onne Seaport.
  5. Freight Cost: usually estimated and added to the invoice.
  6. Total Amount or FOB Value: this is the total value of all items + the total ancillary charges. This must be stated correctly.
  7. Total Cost and Value (Total C&F): this is the FOB Value + Freight Cost. This must be calculated and stated.
  8. Weight of Items: not compulsory to state.
  9. Terms of Agreement: state if applicable the supply arrangement between you and seller. Otherwise this is not a must but depends on you and your seller.
  10. Signature and Stamp: the invoice is to be signed and stamped by the consignor. This may not be an issue with some banks, but others may frown at it.

VAGMON INTEGRATED SERVICES can be reached via our phone contact +2349075526276. We will help you prepare Customs acceptable proforma and commercial invoices. Ultimately, we help clear your cargo from initiation to delivery.

Read Also: NIGERIA IMPORT REQUIREMENT.

CONCLUSION:

Although many confuse proforma invoice for commercial invoice, but there is a marked difference between both documents. In Nigeria for instance, the Customs accept the Commercial invoice as the real value of goods, not the proforma invoice. Proforma invoice is useable to obtain Form M in Nigeria. Thus, this article has answered the question of what is a proforma invoice in Nigeria.

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