"to pay by invoice or proforma"?

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Discussion Overview

The discussion revolves around the concept of payment methods for software sales, specifically the use of invoices and proforma invoices. Participants explore the implications of these payment methods in the context of business transactions, particularly for one-off sales versus established commercial relationships.

Discussion Character

  • Debate/contested
  • Technical explanation
  • Conceptual clarification

Main Points Raised

  • One participant expresses confusion about what customers mean when they ask to pay by invoice or proforma, noting a cultural difference in payment expectations.
  • Another participant clarifies that in the US, an invoice is typically sent after delivery and is used to bill the buyer, suggesting that using it for one-off sales requires a high level of trust.
  • A different viewpoint suggests that a proforma invoice may simply be needed as an official document to navigate corporate bureaucracy.
  • One participant describes the typical process in large businesses, where invoices are part of a structured purchasing process involving multiple departments and approvals.
  • Concerns are raised about the lack of clarity from customers regarding how they intend to pay after receiving an invoice, indicating a potential misunderstanding of the payment process.
  • Another participant notes that the questions about payment methods have emerged recently, suggesting a possible shift in business practices or customer expectations.

Areas of Agreement / Disagreement

Participants express differing views on the role and appropriateness of invoices and proforma invoices in one-off sales, with no consensus reached on the best approach to handle such requests.

Contextual Notes

There are limitations in understanding the specific needs and practices of customers from different regions or industries, as well as the evolving nature of business transactions and payment methods.

Borek
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My English fails me.

If you don't know: one of the things I am doing is selling chemical software - you download the program from my site, you pay with a credit card for the license, you get the registration key. You can also buy paying with a bank transfer.

This is a third or fourth time I am asked if it is possible "to pay by invoice or proforma". Any idea what these people really ask?

Obviously I am missing something, the way we do things in my neck of the woods is you pay with money, not with the invoice. Invoice is something that just confirms you paid (or obliges you to pay on a due date). I suppose they don't want to/can't pay with CC, but they don't ask about alternative payment methods. I don't even know what they ask about.
 
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Borek said:
Invoice is something that just confirms you paid (or obliges you to pay on a due date).
In the US an invoice is something you (the seller) send to them (the buyer) after having delivered the merchandise to them. It bills them for the merchandise. Invoices are normally used only after a commercial relationship has been established between buyer and seller. Using it for a one-off sale would require WAY more trust that I would recommend.

Just say no.
 
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phinds said:
In the US an invoice is something you (the seller) send to them (the buyer) after having delivered the merchandise to them. It bills them for the merchandise.

No misunderstanding here.

phinds said:
Invoices are normally used only after a commercial relationship has been established between buyer and seller. Using it for a one-off sale would require WAY more trust that I would recommend.

For one-off sales I (almost) always tell them I send the registration key after the payment clears out (so technically they pay up front), so that's not an issue.

What baffles me is that they never ask about HOW to transfer money after they get the invoice, which makes me doubt they understand the process - what good is getting the invoice when they can't pay it by CC nor bank transfer, which are the only practical, intercontinental ways?

I sell programs for almost 20 years now, these questions are new (last year or so) and they come from people working in serious companies so I wonder if it is something new that I am missing (or something old that they miss :wink: ).
 
A proforma invoice is a preliminary invoice. They might just need an official looking document to push through their bureaucracy.
 
This is the way large business often operate. The engineers tell the buyers to buy something, buyers negotiate terms and ask for an invoice after checking the spending limits the employee has (or the people that approved the expense), the seller sends the invoice which goes to the Accounts Payable department, and is paid after the shipping/receiving department says the package arrived. Of course there are an nearly infinite number of variations, depending on the contracts or situation.

For many years I could buy some really expensive stuff by starting the process, but there was no way I could send money. Later they decided that the overhead was a PITA for smaller stuff like a box of transistors, so they gave us credit cards with a $1000 limit.
 
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