CHAPTER 4
Transaction Documents are generated by the buyer and seller to define their business relationship and provide an accounting record of individual transactions. These documents range from a simple letter of inquiry to a contract for the sale of goods and a commercial invoice. This category does not include specific export, transport, import, or bank documentation. In the most straightforward sale the buyer might call or fax the seller and order a quantity of goods, and the seller simply issues an invoice. At the other end of the spectrum, the process can be much more formal with an importer/buyer submitting an RFP (Request for Proposal) for bids on a product with 100 pages of detailed specifications, engineering charts and the like. Fortunately, most businesspeople are already familiar with basic transaction documents because these are virtually the same as the ones used in domestic business.
TRANSACTION DOCUMENTS
The Flow of Transaction Documents A typical exchange of documents between buyer and seller proceeds in the following pattern: 1. The prospective importer/buyer (buyer) sends a L E T T E R O F I N Q U I R Y to the proposed exporter/seller (seller) asking if the company either has certain products available or would like to bid on a project. 2. The seller sends a R E P L Y L E T T E R stating an interest in bidding and perhaps includes a C A P A B I L I T I E S S T A T E M E N T . 3. The buyer sends a R E Q U E S T F O R Q U O T A T I O N (R F Q ) (generally if the goods already exist in the exporter’s product line) or a R E Q U E S T F O R P R O P O S A L (R F P ) (generally if the goods have to be designed or manufactured to the buyer’s specification as outlined in the R F P . 4. The seller prepares and sends the buyer a formal P R O P O S A L including product specifications, quantities, prices and terms and conditions. 5. The buyer and seller negotiate specifications, quantities, prices, terms and conditions. 6. The buyer issues a L E T T E R O F A C C E P T A N C E or signs an O R D E R F O R M . 7. The buyer and seller prepare and sign a C O N T R A C T 8. The seller prepares a C O M M E R C I A L
FOR THE SALE OF GOODS.
INVOICE
N O T E : The above documents can be exchanged by letter, fax, courier or e-mail. Some
of the early steps may occur by telephone.
31
