2.1 Main documents

• The main documents used in forming and completing a contract for a transport service are:
• Estimate
• Quotation
• Order
• Invoice
• Typical sequence: estimate → quotation → customer order → invoice.

2.2 Estimate

• An estimate is a rough or approximate costing for a particular job.
• A customer may ask a transport operator for an approximate cost before deciding whether to proceed.
• It may be provided in writing, but the training material notes that it is more frequently given verbally.

2.3 Quotation

• A quotation is a more formal method of providing a price to a prospective customer.
• It is normally written.
• It should state the services identified as meeting the customer’s requirements and the price at which the operator is prepared to undertake the work.
• Quotations normally refer to the operator’s terms of business.
• Terms may include the payment period and a limitation of liability for consequential loss if, for example, a vehicle cannot arrive at the specified time.
• Any exemption clauses must be brought to the other party’s attention before the contract is formed.
• The customer does not necessarily have to read or understand the clauses, but must have been aware that the conditions existed before the contract was formed.

2.3.1 Pro-forma invoice

• A pro-forma invoice may be issued when the operator requires payment in advance.
• It is issued before the work is carried out.
• The customer pays the pro-forma invoice and the operator then performs the work.
• After completion, a proper invoice will normally be issued and endorsed to show that the transport charges have been paid.

2.3.2 Carriage paid

• ‘Carriage paid’ means the transport costs are paid by the sender of the goods (the consignor).

2.3.3 Carriage forward

• ‘Carriage forward’ means the sender does not pay the transport charges.
• The transport charges are paid by the receiver of the goods (the consignee).

2.4 Order

• An order is a customer’s request to be supplied with a specified product or service.
• If the customer accepts the operator’s price and terms, acceptance must be communicated to the operator.
• Ways of placing an order include:
• Issuing a purchase order
• Writing a letter
• Completing a pro-forma invoice provided by the operator
• Telephoning the operator
• Organisations should establish purchasing procedures covering matters such as:
• Which staff have authority to place orders
• Any upper spending limit for an individual transaction
• Whether purchases below a specified value should be made by credit card
• Staff authorised to purchase goods and services on behalf of an employer have significant purchasing power, so controls are important.

2.5 Invoice

• After the goods have been delivered, the transport operator prepares an invoice, in duplicate, showing:
• Quantity
• Description
• Price
• Terms of payment
• For a VAT-registered operator, the invoice must additionally show:
• The operator’s VAT number
• The VAT rate for each item supplied
• The amount of VAT charged
• The tax point
• The tax point is the date on which the goods or services were supplied.
• The training material states that if invoicing takes place within 14 days of supply, the invoice date is accepted as the tax point.
• VAT invoices must comply with the stated requirements; failure to do so could prevent the recipient from reclaiming VAT paid.

The original/top copy is sent to the customer; the duplicate is retained by the operator for records