How to read a Chinese proforma invoice, line by line
A Chinese proforma invoice is the supplier's offer in invoice form. Read it line by line: who the seller is and whether the bank beneficiary matches, which Incoterm and named place apply, whether the freight line is realistic, what HS code is shown, how long the price is valid and what the payment terms are. Each line is something to confirm before paying.
Seller, bank, Incoterm, freight, HS code, validity and payment terms: what each line of a Chinese proforma invoice tells you and what to check.
What a proforma is, and is not
A proforma invoice (PI) sets out what the supplier will sell, at what price and on what terms. Many Chinese suppliers ask for the deposit against it, so in practice it often works as the contract. That is why every line matters: anything missing from it is something you will have to argue about later.
Seller and bank
The seller's name at the top should be the same legal entity as the company on the business licence and as the beneficiary on the bank details at the bottom. If they differ, ask why in writing and ask for the business licence of the company being paid. Our scams guide explains how to check a licence.
Goods and specification
The description should name the model and the configuration: materials, dimensions, components and, for machines, the controller, motors and accessories. A PI that says only the product name lets the supplier ship any version of it. Attach or reference your specification.
Incoterm, named place and freight
The Incoterm tells you who pays for which leg and where risk passes; the named place after it matters as much as the three letters. Under EXW or FOB you arrange the main freight; under CFR or CIF the supplier does, to a named UK port, and the charges after arrival are yours. See Incoterms explained.
If freight is shown as a separate line, compare it with the volume and weight on the packing details. A freight line that looks low for the cargo is a reason to ask who the UK agent is and what it will charge; see cheap CIF quotes and UK destination charges.
HS code, packing and validity
The HS code on a Chinese PI is the Chinese export code. Its first six digits follow the international Harmonized System and should match the first six of your UK commodity code, but the UK code has 10 digits and sets the UK duty, so confirm it yourself; see finding your commodity code.
Check the packed volume and gross weight, the packing method and the price validity date. A short validity date is normal for materials that move in price, but it should not force you to pay before your checks are done.
Payment terms
A split such as a deposit on order and the balance before shipment is common. Make the balance conditional on a passed inspection of the actual goods; our guide on what to check before paying the balance lists the checks.
If you already have a PI, we can check the quote before you pay, with a free preliminary review.
Frequently asked questions
Is a proforma invoice a contract?
It is an offer, but if you pay a deposit against it, it usually becomes the working terms of the deal, so make sure it carries the specification, Incoterm and payment terms you agreed.
Is the HS code on a Chinese proforma the same as my UK commodity code?
Only the first six digits should match. The UK commodity code has 10 digits and sets the UK duty rate, so confirm it from the UK Trade Tariff.
Why does the bank beneficiary differ from the seller?
Sometimes a factory sells through a related trading company. Ask for a written explanation and the business licence of the company being paid before you send money.
Can you review my proforma invoice?
Yes. Cambridge China Bridge offers a free preliminary review of a Chinese supplier's quote or proforma invoice.