The Documents You Need To Trade Internationally
The world of international trade has two divisions – the fun side and the not-so-fun side. Research, marketing, traveling, schmoozing, and sales are part of the glamorous side of the export and import industry. If we talk about the not-so-fun side, it only revolves around documentation. In fact, this aspect of international trade is much more crucial than the fun side of this industry. A single error in the documentation can lead to misplacement, delay, and loss of shipments.
Therefore, to deliver your goods successfully and on time, you need to be careful when it comes to submitting documents. As there are different types of cargo services, such as air cargo, ocean cargo, rail cargo, and door to door cargo, each of them may require a different set of documents. However, it is vital to have knowledge about the standard prerequisite to have a clear understanding of how to perfect the documentation process when sending a cargo shipment. Continue reading if you are willing to know!
#1 Proforma Invoice
For any export exchange, the documentation starts from the moment you receive an inquiry about the products you sell. To start the procedure, a proforma invoice is mandatory. Now, the type of proforma invoice depends on the origin of the inquiry. If the buyer is local, you will have to provide them with a standard quotation form. However, if you have to send goods through air cargo to Dubai, your prospect may need a proper proforma invoice to communicate. It is also a necessity for arranging the finances, license to export and import, and other such details.
A proforma invoice may look like a commercial invoice. To carry out the transfer of goods smoothly, it is necessary that the drafting of this document is accurate. It contains the following specifications:
- Information about the buyer and seller involved in the transaction.
- Details of the goods.
- Price quotation.
- Delivery information, including how and where the goods will be transferred throughout the export and import process.
- Details of the nature of currency that will be used in the transaction, e.g US dollars, Pounds, or Euros.
#2 Commercial Invoice
After the proforma invoice is approved by both the properties and signed, it is time to move forward. The next crucial document that plays a significant role throughout the transaction is a commercial invoice. This document accompanies the goods as, without it, they can not bypass international ports. A commercial invoice specifies every single detail about the entire transaction, from start to finish. As you read earlier, a commercial invoice and a proforma invoice may look similar. However, the former carries additional information like the order number, customer reference, and details like banking and payment methods.
If the goods are being exported via ocean cargo, make sure that the commercial invoice has relevant marine insurance information.
#3 Packing list
When containers of goods are passing through ports, they are subjected to various security checks. As it is a standard protocol in the international trade industry, no container can skip and dodge this process. For shipments to pass these tests, documents like packing lists are a necessity. It helps in the following transaction procedures:
- The freight forwarder can use the information mentioned in the packing list to create the bills of lading for the shipment.
- To make the payment in the bank, the official might ask for the packing list so they can make sure the details are accurate.
- Custom officials that carry out goods inspections ask for the packing list to ensure if the containers are carrying the same products or not.
These three documents are the most crucial for an export or import transaction to go smoothly.