Well I see two interpretations. Legally binding is a contract signed and witnessed by both parties and cannot be changed unless both agree. A pro forma invoice means that the goods my be dispatched and it is binding on you, if you accept it, but you can still change your mind.
Therefore you are legally bound by a signed contract, but not by a pro forma invoice.
Hi IMHO
I think you absolutely correct and they need to be educated:
One could move from the Quotation straight to Invoice and skip the "proforma invoice" stage, but the "proforma invoice makes sense when there is a delay between the time of order and the delivery of goods [e.g shipping or between cities, and as in your case accomodation - there is a time delay here, so this would warrant a proforma invoice]I am in the accommodation business and issue a proforma invoice to clients to do pre-payment. Then, when I receive the payment, I issue a Tax Invoice. That is my understanding.
One option you could add is to get the "user" of your accommodation to sign the proforma invoice and include their details [i.e address or Id no/ck number - whichever is applicable], this way you will reduce the chances of fraud.
Other points to consider:
1.Another point is quotations are are prone to be changed and proformas are less likely if the quotation phase was done thoroughly.
2. If a customer pays cash on delivery of goods or soon after their stay is complete then a " Cash Invoice" is issued this is different to a Tax Invoice [a tax invoice implies terms i.e 30 days after invoice date etc, the format and layout of "cash invoice" and tax invoice is the same only the name "cash invoice" versus "tax invoice".
3. Most business don't like extra paper work unless it assists the business process or is required legally
4. Just like you would only grant terms to businesses that you trust, the same would apply to your use of proforma invoices and the consideration amount, at the end of the day you would need to weigh-out each situation as the scamsters are always innovating.
5. In the bigger picture a signed proforma invoice would provide you with documentary evidence. along with other applicable documentation.
"Tax Invoice" implies that there is VAT involved. A client who can claim VAT back will not be able to claim if they receive a "Cash Invoice". SARS is very clear on this point.2. If a customer pays cash on delivery of goods or soon after their stay is complete then a " Cash Invoice" is issued this is different to a Tax Invoice [a tax invoice implies terms i.e 30 days after invoice date etc, the format and layout of "cash invoice" and tax invoice is the same only the name "cash invoice" versus "tax invoice".
No act of kindness, no matter how small, is ever wasted. - Aesop "The Lion and the Mouse"
Not unless you are buying something via Game or Incredible Connection etc, they will give you a Pro-Forma which can either be ignored if you are not going to buy it or changed if you change your mind to another product. A pro-Forma will be given if you would like to claim from Insurance for example. Once again a non binding or non legal document between yourself and the company giving it in the sense they cannot hold you to it.Another point is quotations are are prone to be changed and proformas are less likely if the quotation phase was done thoroughly
@ Mike C
Perhaps I wasnt clear enough, bot are "Tax Invoices" however one is a Credit Sale and the other a Cash Sale, and the relevant description should be shown on the document"Tax Invoice" implies that there is VAT involved. A client who can claim VAT back will not be able to claim if they receive a "Cash Invoice". SARS is very clear on this point.
You would find the shipping Industry to be very very different, I dont think small purchase such as from Game would warrant the unnecessary additional paper-work, as I mentioned previously there must be good reason for a Proforma Invoice, otherwise, it begs the question why the extra hassle?Not unless you are buying something via Game or Incredible Connection etc, they will give you a Pro-Forma which can either be ignored if you are not going to buy it or changed if you change your mind to another product. A pro-Forma will be given if you would like to claim from Insurance for example. Once again a non binding or non legal document between yourself and the company giving it in the sense they cannot hold you to it.
Well IMHO's initial request was simple and had nothing to do with the shipping industry, therefore very similar to the ones I mentioned.You would find the shipping Industry to be very very different, I dont think small purchase such as from Game would warrant the unnecessary additional paper-work, as I mentioned previously there must be good reason for a Proforma Invoice, otherwise, it begs the question why the extra hassle?
There is a time and a place for a pro-forma invoice as I have mentioned, but a pro-forma is certainly not legally binding (as I have also mentioned)
Thanks guys, interesting points came up and I understand better from the 'customers' point of view.
I have basically two options.
1. Stick with Proformas and piss my customers off.
2. Change the wording Proforma to Quotation, issue a Tax Invoice when they request and show Due amount , ie, not paid yet. It is then up to the company to get a paid invoice from me after they paid, if they want one.
What pisses me off, is that these invoices get used to claim expenses and VAT, although they never stayed or paid. But I suppose it is not my problem. SARS must sort that part out.
Reps is the main culprits. They come get an Invoice from you, to get their company to 'pay upfront'. They then go stay with their 'skelm', never pitch and claim the expense. I am then forced to cancel the number in my system and sit with an empty room. So in those cases I will just refuse. I will however follow option 2 above for companies requesting via email.
~Expenses will eat you alive! - My first Boss~
@IMHO - be careful of cancelling invoices as SARS immediately suspect foul play. I would suggest that it is better practice to issue a credit note with a link to the Invoice. When you send that on to the company concerned, they will also then realise that the rep "pocketed" the money.
There will always be skelms, I suppose, but they have to answer for what they do ... as long as your side is being kept clean.
No act of kindness, no matter how small, is ever wasted. - Aesop "The Lion and the Mouse"
Elijah (27-Jun-13)
IMHO
I have printed a batch of "Proforma Invoice/Quote pads" I just write them out manually and use that. They do not form part of my invoicing and are memos only.
Only stress when you can change the outcome!
Brilliant!Originally Posted by Mike C
~Expenses will eat you alive! - My first Boss~
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