How to show an advance payment discount on a commercial invoice?

Advance payment in international trade defined as a payment that is made ahead of shipment take place, such as importers are paying for whole or part of the goods value before they actually receive them. 

Sometimes exporters and importers agree on an advance payments, which will be taking place ahead of the shipments. 

These kinds of advance payments should be demanded via proforma invoices and the advance payment amount must be shown as a discount on the commercial invoices.

On this page I will try to explain how to show an advance payment discount on a commercial invoice.


How to show an advance payment on a proforma invoice?
Advance payment should be shown on a proforma invoice with an express reference. Below you can find some express reference examples of advance payments.
  • 30% of proforma invoice total will be paid in advance 1 week after order confirmation, 70% of order amount will be paid against copy of shipment documents send via fax or e-mail to the importer.
  • 25% of proforma invoice amount will be paid in advance on order confirmation, 75% of remaining amount will be paid cash against documents.
  • 20% of proforma invoice will be paid in advance outside of the letter of credit, 80% of remaining amount will be paid against presentation of conforming documents under letter of credit.


    Proforma invoice example with an advance payment clause.
    How to show an advance payment discount on a commercial invoice?

    Advance payment amount should be shown as a discount on the commercial invoice as it has already been paid by the importer. 

    On the above example advance payment amount is 20% of proforma invoice total, which is 20.000,00USD. This amount must be indicated as a discount on the commercial invoice.

    Please check below picture for further explanation.

    Commercial invoice example with an advance payment discount.
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