As an Indian exporter, navigating the complexities of international transactions and compliance can feel like solving a complex puzzle. Today, we'll explore a crucial piece of that puzzle: FIRC

FIRC full form is Foreign Inward Remittance Certificate. It is a document issued by banks as proof of receiving international payments. Over the years, regulations around FIRC have changed significantly, creating confusion and mystery around this important document. Let's clear the air and decode the what, who, and why of FIRC.

FIRC or Foreign Inward Remittance Certificate serves as a proof of foreign money transfer for exporters in India. Until 2016, <a href="https://rbidocs.rbi.org.in/rdocs/FEMAMASTER/PDFs/1061.PDF">AD (Authorised Dealer) Category I Banks</a> were authorised to issue FIRCs to exporters for receiving payments from foreign sources. This document was essential for exporters to obtain after each cross-border payment. It served not only as proof of payment receipt but also as a crucial document for claiming export-related incentives, such as tax exemptions on foreign currency payments received in India.

As we've covered, the full form of FIRC is Foreign Inward Remittance Certificate and for a long time it served as proof of export income from abroad. However, with changing regulations, the function of FIRC has also changed significantly. Let's take a look:

FIRA is often still referred to by its old name, FIRC. While both documents serve the same purpose, FIRC is technically only issued for returns on&nbsp;Foreign Direct Investment (FDI )or Foreign Institutional Investment (FII). For all other export collections, FIRA/BIRC is what you need.

For clarity, we'll use the term FIRC moving forward, but it refers to FIRA throughout.

Anyone receiving foreign payments needs FIRC.&nbsp; Beyond goods and service exporters engaging in international trade, many individuals and entities may receive international payments without realising it.&nbsp;

Overall, the following typically require a FIRC:

Beyond compliance, here’s why FIRC is crucial for exporters:

FIRCs are issued by AD Category I banks. You can contact your bank to get your FIRC after receiving your foreign payment. <a href="https://www.skydo.com/blog/how-to-get-firc-certificate-online">Alternatively, you can also use platforms like Skydo to get your FIRC instantly after every payment.&nbsp;</a>

Who Needs FIRC and Why It’s Important for Exporters?

FIRC (Foreign Inward Remittance Certificate) is essential for anyone receiving foreign payments, including:

Exporters, in particular, rely on FIRC for two key reasons:

FIRC is issued by Authorized Dealer (AD) Category I banks, and businesses can obtain it directly from their bank. However, it is usually a cumbersome process requiring multiple follow-ups and most banks charge around INR 500 to issue each FIRC.&nbsp;In contrast, platforms like Skydo offer a fast, hassle-free solution, providing an instant FIRC for free after every foreign payment—no manual requests, no extra costs.

This is a sample FIRC document. All crucial remittance details have been masked for security purposes. Now let’s break the content of a FIRC down: 

Receiving your export payment directly through your bank can make obtaining an FIRC a lengthy process. You need to submit a request to the bank, and the bank typically takes 7-15 days to provide the FIRC. You may also need to follow up multiple times, and banks often charge at least INR 400 to issue the FIRC, depending on the institution.

<a href="https://www.skydo.com/blog/how-to-get-firc-certificate-online">Getting a FIRC</a> might sound like a hassle, but with Skydo, it's a breeze. Our fully automated payment system along with built-in partnerships with banks, ensures effortless compliance with RBI guidelines, without needing any manual intervention.

When you receive an export payment through Skydo, we automatically generate the required FIRC for you at no extra cost. Just log into our user-friendly dashboard, and you'll find your FIRC ready to download, complete with all the details you need. 

In conversations around FIRC, there are a few more terms that get frequently mentioned, one of them being eFIRC. So what exactly is <a href="https://www.skydo.com/blog/efirc-firc-brc-essentials-differences">eFIRC?</a>

What is the difference between eBRC and FIRC?

Generally speaking, e-BRC applies mostly to goods and software exporters (under <a href="https://stpi.in/en/home?no_follow=true/">STPI</a>). If you are one of them, you can use this simple decision tree to understand which documents you will need:

Exporting goods and services is considered Zero-Rated Supply, meaning it is subject to 0% GST. However, to claim a GST refund for the input tax credit, exporters must provide the required documents including FIRC. These documents authenticate that the business is claiming a refund because it exported services and couldn't offset its input tax credit as it would in normal domestic business. Without FIRC, claiming a GST refund may not be possible

As we surge in cross-border transactions, ensuring compliance and safeguarding against illicit activities has become a pressing concern. However, at Skydo, we believe your focus should be on advancing your business, not on grappling with compliance challenges.

With Skydo, enjoy seamless international payments, delivered promptly and without any hidden fees. But that's just the beginning! Every time you receive a cross-border payment, an auto-generated FIRC is readily available for you to download, relieving you of compliance burdens so you can devote your energy to what truly matters: driving your business forward.

FIRC full form is Foreign Inward Remittance Certificate. Learn what FIRC is, its importance for exporters and freelancers, and how to obtain it easily

FIRC: Full form, meaning and RBI guidelines

Dive into the world of FIRC. Explore the full form, importance, and process of obtaining FIRC for your international transactions

Foreign Inward Remittance Certificate (FIRC): Full form, meaning and RBI guidelines

Prashanth

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Prashanth Kumar

EEFC account is a well-known term for exporters receiving international payments. EEFC account full form is Exchange Earners Foreign Currency.

 Offered by AD Category I Banks, an EEFC account allows you to retain foreign income received in its original currency (USD, EUR, GBP, etc.) for up to 60 days.&nbsp;&nbsp;In this article, we will dive into EEFC account full form, meaning, and benefits of an EEFC account, and explore other efficient and cost-effective ways to handle your international payments.

Since 2016, India’s cross-border remittances have grown at<a href="https://www.pwc.in/assets/pdfs/consulting/financial-services/fintech/point-of-view/pov-downloads/the-evolving-landscape-of-cross-border-payments.pdf?no_follow=true"> 8% CAGR, </a>fueled by global trade, travel, and a rising international workforce. Yet, high fees and hidden charges make these transactions costly and challenging.

 To address these issues, the Reserve Bank of India (RBI) introduced EEFC account.&nbsp; Being current accounts, these accounts do not yield any interest. Each bank offering EEFC Account supports a specific number of currencies, also allowing you to hold multiple currencies in a single account. Initially designed to help exporters manage their foreign exchange earnings, EEFC accounts are available to companies, individuals, and joint account holders.

EEFC Account Benefits: What Do You Need to Know?

EEFC account or EEFC account full form, Exchange Earners Foreign Currency Account, allows exporters to deposit their foreign exchange earnings without converting them to Indian rupees. Currently, multiple <a href="https://rbidocs.rbi.org.in/rdocs/FEMAMASTER/PDFs/1061.PDF?no_follow=true">Authorised&nbsp;Dealer (AD) Category I banks </a>in India offer EEFC account including DBS, ICICI, HDFC, Axis Bank and many more.&nbsp;

However, it's always a good idea to speak with the bank first to confirm their services.

Now, let’s take a moment to understand EEFC account benefits.

An EEFC account lets you hold foreign currency earnings until the last day of the following calendar month. For example, if you receive foreign payments on June 16th, you can keep them in your EEFC account until July 31st. This holding period gives you the flexibility to monitor forex rates and convert the funds to INR when it's most beneficial, while also allowing you more time to make foreign payments directly from your EEFC account without conversion

However, keep in mind that you can only retain your foreign exchange earnings until the last day of the succeeding calendar month  after which it will be automatically converted to INR. So, don’t get too comfortable parking your foreign exchange in your EEFC account—use it wisely before the deadline sneaks up on you!

An EEFC account not only lets you temporarily park your foreign exchange earnings but also enables you to make foreign payments without converting them to INR, avoiding two-way currency conversion costs.&nbsp;

As an exporter, when you receive foreign payments via your Indian bank account, they are typically converted into INR, incurring transaction costs and currency conversion charges. If you need to make an international payment, you'll have to convert your INR back into foreign currency, incurring additional fees. Essentially, you end up paying currency conversion costs for both receiving and sending foreign payments, doubling your costs.

An EEFC account bypasses this inconvenience by allowing you to retain 100% of your foreign exchange earnings and make foreign payments directly from the account without having to convert it.&nbsp;

In essence, an EEFC account facilitates seamless international transactions by giving users the option to hold and manage their foreign exchange earnings better.&nbsp;

Resident individuals of India, whether individuals or companies earning foreign exchange, can open an EEFC account. However, entities in<a href="https://nsez.gov.in/Resources/SEZ%20FAQs.pdf?no_follow=true"> Special Economic Zones (SEZs)</a> cannot open an EEFC account, though they can open a <a href="https://www.icicibank.com/nri-banking/bankaccounts/foreign-currency-account#:~:text=An%20RFC%20(Resident%20Foreign%20Currency,hold%20funds%20in%20foreign%20currency.?no_follow=true">foreign currency account</a>.

For context, a Special Economic Zone (SEZ) is a designated area where businesses operate without paying certain taxes and duties. It's essentially considered foreign territory for trade purposes.

Which Transactions are Eligible Under an EEFC Account?

As a current account, an EEFC account supports various transactions, including:

However, being a current account, an EEFC account cannot support capital account transactions. This means foreign remittances in the form of loans, investments, or returns on investments are not permitted in your EEFC account.

The process of Opening an EEFC account is similar to that of a regular current account. You'll need to complete an application form and submit the required documents. However, there are additional requirements, such as providing proof of status, which aren't typically necessary for a regular account.

Once you've submitted your application and documents, the bank will review them. Upon approval, they will furnish you with your EEFC account details, including the account number.

Do note that the procedure may vary slightly across banks, so it's advisable to consult with your bank to understand their specific application process.

What Documents are needed for opening an EEFC account?

Although the specific documents required can vary from bank to bank, here are the typical documents you'll need to open an EEFC account:

As we've discussed, an EEFC account can be opened by all foreign exchange earners, whether individuals, partnership firms, or public/private limited companies. Depending on the entity opening the EEFC account, specific documents may be required. For example:

These requirements ensure that the necessary legal and compliance standards set by the government of India are met for each type of entity.

What are the&nbsp; EEFC Accounts Charges?

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Most banks don’t charge a fee for opening and maintaining an EEFC account. However, there are several ancillary charges that banks may levy on various activities linked to EEFC accounts:

To get a complete picture of the applicable fees and charges for your EEFC account, make sure to talk to your bank. This will help you avoid any surprises and ensure you understand all potential costs involved.

Why Choose Skydo Over Traditional EEFC Accounts?

EEFC accounts offer exporters a convenient way to manage and park their foreign exchange earnings temporarily. This holding period allows them the freedom to monitor and choose the exchange rate at which they want to convert their foreign exchange.

However, despite these advantages, receiving international payments through an EEFC account can be quite costly, regardless of your banking partner. As we have seen, banks often levy numerous charges on EEFC account transactions, including SWIFT charges, currency conversion fees, forex markups, FIRA charges, and more. These fees can quickly add up, making the process expensive.

In summary, while an EEFC account offers flexibility and control, the associated costs can add up quickly.&nbsp;

<a href="https://www.skydo.com/blog/eefc-account-vs-payment-platforms">At Skydo, we understand the challenges of traditional banking </a>especially when it comes to cross-border transactions. For freelancers and small businesses, constantly monitoring forex rates and tracking bank fees is a time-consuming and resource-draining task. That’s why we offer businesses and freelancers a fast, secure, and less expensive way to receive international payments. With Skydo, you can set up an international bank account in less than 5 minutes. Your foreign clients can pay into this account, making it a local transfer and eliminating SWIFT charges.

Further, we convert your foreign earnings to INR at live forex rates, without any markup or currency conversion fees, ensuring you keep more of your earnings. All we charge is a flat transaction fee: USD 19 for remittances below USD 2000 and USD 29 for remittances over USD 2000. And yes, you also receive an instant FIRA for every transaction at no extra cost, helping you stay compliant.&nbsp;

Switch to Skydo and simplify your international payments while maximising your earnings. Experience the Skydo difference today.

EEFC Account Overview: Full form, Meaning, Eligibility & Benefits

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Imagine this: you put a lot of effort, time, and creativity into a project for a client, only to get delayed or ignored when it comes to payment. Freelancers face this common and frustrating problem, especially when working with new or unreliable clients. A staggering<a href="https://www.chaserhq.com/blog/87-of-businesses-paid-late-insights-from-2022-late-payments-report"> 87% of businesses reported being paid late</a> in 2022.&nbsp;

Late payments can hurt your cash flow, motivation, and reputation as a freelancer. Then, how can you deal with this issue and ensure you get paid on time for your work?&nbsp;

This blog post shares some tips and strategies that can help you prevent and handle late payments and some communication strategies to use when dealing with the same.

How To Prevent Late Payments In The First Place?

Here are some tips to help you avoid payment delays and ensure timely payments from your clients.

Despite your best efforts, you may still get late payments often. Follow the steps below to handle the situation professionally and effectively.

Communication Strategies To Use When Dealing With Late Payments

Communication is key to managing and resolving late payment issues. Here are some ways to communicate with your clients effectively and professionally about payments.

If the client doesn’t resolve the late payment issue after following the steps above, you may need to escalate the matter and take more drastic measures. However, before you do so, you should consider the following factors.

Late payments are a common challenge for business owners and freelancers, but you can mitigate them with proper communication and preventive measures. To deal with late payments, start by preventing them with reliable clients and clear contracts.&nbsp;

If payments are late, evaluate the situation, resend invoices, and consider halting work. Finally, maintain open communication, offer incentives, and escalate the issue if necessary.

Q1. How do you tell a client they are late on payment?

Ans. By sending a friendly and polite reminder via email, phone, or text message, you can notify the client that they are late on their payment. Attach the invoice copy for reference, along with the invoice number, amount, and date. You should ask them to acknowledge receipt and inform you of the payment status.

Q2. How do I professionally ask for a late payment?

Ans. You can professionally ask for a late payment by following the communication strategies mentioned above, such as offering incentives, highlighting the due date, sending reminders, approaching the client with empathy and professionalism, and presenting solutions.&nbsp;&nbsp;

Q3. How do I assess the financial reliability of potential clients before engaging in a project?&nbsp;

Ans. To determine their financial stability and creditworthiness, consider using credit check services or financial analysis tools. You can also ask your network for referrals from freelancers or professionals.

Q4. How can technology and software help in managing and tracking payments efficiently?&nbsp;

Ans. Technology and software can enhance your ability to manage and track payments. For example, invoicing software can automate invoicing, send reminders, track payments, and generate reports.&nbsp;

Accounting software can help you manage your income, expenses, and cash flow. Payment gateways can facilitate online payments and provide secure and convenient payment options for your clients. Project management tools can help you track the progress of your projects and the associated payments.

Remember, dealing with late payments is a common challenge for many businesses and freelancers. However, with the right strategies and tools, you can ensure timely payments, maintain healthy client relationships, and improve your financial well-being.

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Among the key players in the United Kingdom's financial landscape, the Faster Payments Service (FPS) and Bankers' Automated Clearing Services (BACS) stand out as cornerstones, facilitating the seamless movement of funds in different ways.

As a freelancer or service exporter in India, it is important to understand both payment methods as your UK-based clients may opt for either of these payment methods.&nbsp;

Understanding The Faster Payments Service (FPS)

The Faster Payments Service (FPS) was created in 2008 and reduces the payment times between bank accounts within the United Kingdom. Previously, such electronic payments between UK bank accounts used to take at least 3 business days, which the FPS has reduced to a matter of seconds.&nbsp;

In 2022, the Faster Payments Service processed transactions worth <a href="https://www.wearepay.uk/what-we-do/payment-systems/faster-payment-system/faster-payment-system-statistics/">£3.2 trillion. </a>When making an FPS payment, there are three stakeholders involved in initiating and executing transactions:&nbsp;

<a href="https://www.pwc.in/industries/financial-services/fintech/payments/analysing-faster-payment-systems.html">A successful FPS transaction</a> consists of two vital steps:&nbsp;

There is no option to cancel or reverse them after initiation. In case of a mistake, entities can follow the Credit Payment Recovery (CPR) procedures. The procedures are in place to help recover any FPS payment sent due to an error.&nbsp;

Understanding BACS (Bankers' Automated Clearing System)

BACS, or Bankers' Automated Clearing System, is an electronic payment system allowing participants in the UK to send and receive funds. The electronic network includes 16 main building societies and clearing banks in the UK. Operated and managed by Pay.uk, it is one of the most cost-effective payment methods for entities such as freelancers and small businesses to send and receive payments.&nbsp;

BACS handles payments within the UK through UK-registered bank accounts and provides the following payment facilities:&nbsp;

In 2022, BACS processed <a href="https://newseventsinsights.wearepay.uk/media/ndopemiv/bacs-annual-processing-statistics-2022.pdf">direct debits of £4.7 billion</a> and direct credits of £2 billion. Currently, both the BACS payments; Direct Debit and Direct Credit work on a three-day cycle.&nbsp;

Similar to FPS, BACS payments also have an upper limit of £1 million. However, banks have the right to set their upper limit on the per transaction and daily amount users can transfer using BASC.&nbsp;

Comparing FPS and BACS As Payment Methods&nbsp;

Here is the difference between FPS and BACS as payment methods.

When choosing between the payment methods, it depends on:

For example, if you want to make payments without the urgency of settlement, you can use BASC. However, if you want to settle payments immediately, FPS would be the right choice.&nbsp;

​​To pay by BACS or FPS, you need the following information:&nbsp;

FPS and BACS for Indian Freelancers and Tech Service Exporters

As an Indian freelancer, tech service provider or any other type of business entity collaborating with clients in the UK, both payment schemes make it easier for international clients to make payments. This is because most business entities in the UK have a UK bank account, which they can easily use to transfer funds using FPS and BACS.&nbsp;

However, it becomes cumbersome for Indian freelancers or other service exporters to create a traditional bank account in the UK. Indian service exporters such as freelancers must create a virtual account on third-party platforms such as <a href="https://www.skydo.com/">Skydo</a>.&nbsp;

Using <a href="https://www.skydo.com/">Skydo</a>, you don’t have to open a traditional bank account in the UK and can virtually receive Pound Sterling payments. Once received, you can transfer funds from your virtual BACS and FPS account to your Indian bank account after converting the funds into INR.&nbsp;

In their essence, both FPS and BACS payment schemes have changed the B2B payments landscape in the UK. These play pivotal roles in facilitating seamless and efficient transactions within the country, serving both businesses and individuals alike.

The FPS, with its real-time capabilities, has revolutionized payment processing, offering a swift and secure channel for funds transfer. On the other hand, BACS, with its legacy and stability, remains a vital player and ensures the smooth flow of funds on a scheduled basis.

For Indian freelancers and service exporters, third-party platforms such as <a href="https://www.skydo.com/">Skydo</a> are making it easier to collaborate with UK clients and receive payments virtually, without having to create a UK bank account. You can open your virtual FPS or BACS account by visiting the <a href="https://www.skydo.com/">Skydo</a> website.&nbsp;

Q1. Do I need a UK bank account to receive FPS Payment?

Ans. To receive FPS payments, having a UK bank account is typically necessary. The FPS system relies on the UK banking infrastructure, and almost all participants are UK-based. In case you don’t have a UK bank account, some financial institutions and third-party payment providers like offer virtual account solutions for easy cross-border payments.

Q2. Do I need a UK bank account to receive BACS Payment?

Ans. Yes, typically, you would need a UK bank account to receive BACS (Bankers' Automated Clearing Services) payments. To receive BACS payments, you would generally need to have a UK bank account where the funds can be deposited. However, you can use third party service providers like Skydo to create virtual accounts and still receive BACS Payment.

Q3. What is the limit for FPS and BACS transactions?

Ans. Individuals can send up to £1 million using FPS and BACS. Banks set their limit for the maximum amount entities can send per transaction or daily.&nbsp;

Q4. What is the settlement time for FPS and BACS transactions?

Ans. As the name suggests, FPS payments are one of the fastest and are settled almost immediately after payment initiation. However, some payments may take up to two hours. BACS takes three days to settle.

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As an Indian importer or international trader, you may have occasionally spotted the mysterious purpose code "1501" on your bank statement. Purpose code 1501 primarily deals with refunds and rebates associated with imports. In this blog post, we will discuss this purpose of code, explain its importance and look at a few common scenarios where code P1501 is used.

Before we dive into the details of purpose code 1501, here's a brief snapshot of Purpose Code 1501:

With the Reserve Bank of India (RBI) releasing its <a href="https://kpmg.com/us/en/taxnewsflash/news/2025/04/india-revised-draft-export-import-regulations.html">revised draft </a>of the 'Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2025' on April 4, it’s crucial for businesses to stay informed about these changes to ensure ongoing compliance and avoid surprises down the line."

Purpose Code 1501 in India specifically denotes transactions related to refunds or rebates received on account of imports. This code signifies that you've received money back from foreign entities associated with goods or services previously imported into India.&nbsp;For example, imagine you run a business in India that imports electronic components from China, assembles them locally, and sells the final product. If one of the components you imported turns out to be faulty and you file a complaint, the supplier may issue a refund for the defective part. This refund would need to be categorized under Purpose Code P1501.

Why is Understanding Purpose Code 1501 Important?

Note that the purpose code 1501 is used specifically for inward remittances (receiving refunds) related to imports. For outward remittance, i.e for sending refund abroad, purpose code S1501 is used.

Claiming Import Duty Refund Using Purpose Code 1501

Imagine you're an importer in India and you've just received a shipment of goods from overseas. Let's say you paid some import duty on these items. Now, for some reason, maybe a few items were damaged, or you were overcharged, you're due a refund on that duty. Here's a simplified look at how that refund might come back to you and where Purpose Code P1501 plays a role:

So, in simple terms, if you get an import duty refund that comes from a company or entity outside of India, your bank will use Purpose Code P1501 to categorize this money coming into your account. It's like a special tag that helps everyone understand the reason for the transaction.

How to Select the Right Purpose Code for Your Transaction?

Choosing the correct purpose code is crucial to ensure smooth and compliant transactions, especially when dealing with international payments. If you're receiving funds from abroad related to imports, such as refunds, rebates, or adjustments, Purpose Code 1501 should be used.

Before finalizing any transaction, carefully review the nature of the payment to confirm it accurately reflects the purpose of the funds. For instance, if the payment is not related to an import-related refund or rebate (e.g., a personal remittance from abroad), a different purpose code would be applicable.

To avoid discrepancies or delays, ensure you have all the necessary documentation to support the use of Purpose Code 1501. This may include:

If you're uncertain about the appropriate purpose code for your transaction, consult your bank or a financial expert. Using the wrong code can lead to delays in processing, scrutiny from regulatory authorities, and even potential penalties.

By carefully selecting the correct purpose code, you can ensure smooth and compliant transactions while maintaining accurate financial records.

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Most new exporters find the trade paperwork overwhelming. First, the volume and second, the lack of experience, lead them into a spiral of confusion.

If you're experiencing a similar situation, we might have the right blog to start cutting through this confusion. Among the various documents, the proforma invoice is one of the most frequently used by exporters worldwide. Is it the same as a formal invoice? Not really. It plays a different role.&nbsp;

We suggest reading this comprehensive guide to find out everything about proforma invoices. It breaks down all the details, from their basic definition and purpose to practical formats and examples. 

A proforma invoice is a preliminary bill of sale that provides a detailed estimate of costs before the sale is confirmed. It defines the key transaction details upfront so that the buyer and seller understand the proposed terms before the transaction is initiated. This helps to streamline the sales process and avoid going back and forth.

A proforma invoice typically includes detailed information like item descriptions, prices, shipping weights, and transport charges. It’s important to remember that it is only a provisional document and must be followed up with a commercial invoice to request payment from the buyer.&nbsp;

Here’s a scenario to help you understand the practical application of a proforma invoice. Imagine a textile exporter in India receiving a bulk order of 1,000 meters of silk fabric. The exporter is new and eager to close the deal but is unsure about the exact shipping cost and&nbsp;customs duties. So, they share a proforma invoice that includes the fabric cost, estimated shipping to the U.S., potential customs duties, and other handling fees.

By providing this, the exporter gives the buyer a clear picture of the total cost. The buyer can use this information to negotiate with the exporter and make a more informed decision. They can also use it to arrange import permits or financing.

Here are the most common reasons why exporters choose to use a proforma invoice in international trade:

Negotiation and Transparency: It provides a clear preview of the proposed international transaction and invites open discussion about prices, terms, and conditions

Professional Commitment: The invoice shows the seller's willingness to provide goods at the agreed price and duration, which establishes trust with potential customers

Buyer Acknowledgement: It formally recognizes the buyer's intent to purchase and outlines the mutual understanding of the transaction

Streamlined Process: By defining transaction details upfront, proforma invoices reduce back-and-forth communications, saving time for both parties.

Internal Approvals: Buyers use proforma invoices to get internal purchase approval and help their finance and procurement teams understand the transaction details.

Cost Efficiency: Proforma invoices help businesses reduce administrative overhead by simplifying the quote-to-cash process - the entire cycle from the buyer showing interest to receiving the payment.

Here are two sample proforma invoices to give you an idea about the presentation of the above details:

You must have observed the following details present in both the images, which resonates with what we covered in the previous section:What we covered in the previous section:

You might have also observed that while both the proforma invoice templates are acceptable, they differ in design. The first is more modern and has a spacious layout. It also covers only the basic shipping information, like the port of loading and discharge. The second is more compact in design and looks more traditional, but it covers detailed shipping information, including the number of packages, weight, and carrier name.

Is Proforma Invoice Required For Indian Exporters?

A proforma invoice is not legally compulsory for Indian exporters, but it has become an essential document in the export sales process. For you as an exporter, a proforma invoice acts as a preliminary document that confirms the importer's order and provides a detailed breakdown of shipment costs. It also becomes a foundational document that you can use to prepare the final commercial invoice.

From an importer's point of view, the proforma invoice gives them detailed information on the goods they will receive. It specifies the item quantity, price, and other relevant transaction information. This ensures transparency and mutual understanding between you and the importer before any goods are shipped.

The other significant advantage of a proforma invoice is its ability to establish payment arrangements. You can use it to set up letters of credit or to secure trade financing.

In summary, while the law does not mandate a proforma invoice, it is a good practice to follow. It provides a detailed, preliminary account&nbsp;of the transaction, builds trust and transparency with the buyer, and reduces financial risks.

Receive Seamless Export Payments With Skydo

A proforma invoice is not a legal document that can be used to request payment from buyers, but it is still a strategic tool for an exporter. It builds trust and irons out misunderstandings, helping to push the deal to the next stage. But as you move towards finalizing the deal with the buyer, you need a trusted invoicing and payment platform.

This is where Skydo comes in. It is a comprehensive solution for Indian exporters like you to manage invoices and multi-currency payments in one place. Let's talk about Skydo's invoicing capabilities first.

But Skydo's real strength lies in collecting payments from your buyers. You might have heard from fellow exporters losing money to high transaction fees and forex markups during international transfers. Skydo takes a much cost-effective approach to ensure you get the maximum value.

Skydo works with you like a strategic partner to take your business global. Sign up now and revolutionize your international payment process