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What should I pay attention to before submitting the Project Initiation (PI) document?
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We have a new client who wants to place an order, and they asked me to send them a proforma invoice (PI) first. I want to ask, is there anything special I need to pay attention to before sending the PI? I'm worried that sending it incorrectly might cause trouble later on.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
Before issuing a Proforma Invoice (PI)，it is essential to complete three compliance reviews。
1. Verifying the buyer’s qualifications: Check the company’s registration information，tax registration，and import qualifications through official channels to avoid dealing with shell companies or fraudulent buyers。
2. Ensuring product compliance: Confirm the HS code and regulatory requirements，and verify whether special documents like export licenses，commodity inspections，or certificates of origin are needed，especially for goods subject to anti-dumping measures，quota management，or technical controls。
3. Assessing payment risk: Research the foreign exchange control policies in the buyer’s country to ensure payment methods comply with regulatory requirements and avoid subsequent issues with currency conversion。
Once a PI is issued，it constitutes a legal offer. Erroneous clauses may lead to customs seizures or legal disputes. It is recommended to draft a contract framework first and then translate it into a PI。
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Key Notes。
- Terms like "HS code" and "commodity inspections" require industry-specific translations。
- Legal terms like "foreign exchange control policies" and "legal disputes" should be translated accurately。
- Phrases like "checking whether special documents are needed" need to convey the urgency of compliance。
- The structure of the translation should mirror the logical flow of the original text，ensuring clarity and professionalism.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The trade terms and logistics information in the PI must be confirmed in advance. Firstly, Incoterms? must be specified to a specific version (e.g., 2020) and location (e.g., FOB Shanghai Port), which directly determine the division of freight, insurance, and customs clearance responsibilities. Secondly, the shipping and receiving addresses, contact information, and phone numbers must be accurate down to the door number, especially for international express deliveries, where even a single error could lead to a return shipment. Thirdly, the product name, specifications, quantity, gross/net weight, and volume must fully match the actual shipment to avoid customs inquiries due to discrepancies between the PI and customs declarations. It is recommended to simultaneously confirm the production cycle and shipping schedule, and indicate the expected shipping date and validity period (usually 15-30 days) in the PI's notes section to prevent clients from demanding shipment at the original price with an expired PI.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
The PI (Proforma Invoice) is a crucial document for securing orders. Before sending it, it's essential to clarify four core terms with the client:
1. Payment Methods:
- For T/T, specify the down payment ratio (recommended 30%) and the deadline for the final payment.
- For L/C, confirm the issuing bank's qualifications and the type of credit letter.
2. Currency and Exchange Rate:
- Specify whether the exchange rate on the PI issuance date applies or whether a floating range is agreed upon to avoid profit erosion due to exchange rate fluctuations.
3. Validity Period and Price Lock:
- State the PI's validity period (recommended 15 days) and its automatic invalidation after expiration to prevent clients from demanding original prices after raw material price increases.
4. Additional Terms:
- Include quality acceptance standards, breach of contract liability, and dispute resolution methods (recommended to specify the China International Economic and Trade Arbitration Commission).
It’s advisable to send a follow-up email before sending the PI, requesting the client’s confirmation of each item. This demonstrates professionalism and provides written evidence of the agreement.