How do you handle changes or cancellations of orders after sending a proforma invoice?

1 Communicate clearly

The first thing you should do when you receive a change or cancellation request from your customer is to communicate clearly and politely. Acknowledge their request, ask for the reason, and explain the implications of the change or cancellation on your side. For example, you may have already ordered the materials, reserved the production capacity, or incurred other costs. You may also have other customers waiting for the same product or service. Try to understand their situation and offer alternatives or solutions that can satisfy both parties.

2 Review your terms and conditions

The next thing you should do is to review your terms and conditions that you specified in your proforma invoice. These should include the validity period of the offer, the cancellation policy, the deposit or advance payment requirements, and the penalties or fees for any changes or cancellations. If you have a signed contract or agreement with your customer, you should also refer to that document. Make sure you know your rights and obligations, and enforce them accordingly.

3 Negotiate a fair outcome

Depending on the nature and timing of the change or cancellation request, you may need to negotiate a fair outcome with your customer. For example, you may agree to modify the order details, such as the quantity, quality, or delivery date, in exchange for a price adjustment or a compensation. You may also agree to cancel the order, but retain the deposit or charge a cancellation fee to cover your expenses. Alternatively, you may offer a credit note or a discount for a future order, if you want to maintain a good relationship with your customer.

4 Update your records and documents

Once you have reached an agreement with your customer, you should update your records and documents accordingly. You should send a revised proforma invoice or a cancellation confirmation to your customer, and make sure they acknowledge it. You should also update your inventory, accounting, and tax records to reflect the change or cancellation. If you have any third-party suppliers or partners involved in the order, you should inform them as well and adjust your arrangements with them.

5 Learn from the experience

Finally, you should learn from the experience and try to prevent or minimize the occurrence of changes or cancellations in the future. You should review your proforma invoice format and make sure it is clear, accurate, and comprehensive. You should also review your terms and conditions and make sure they are fair, reasonable, and enforceable. You should also evaluate your customer relationship and communication, and identify any areas for improvement. By doing so, you can reduce the risks and costs of changes or cancellations, and improve your invoicing efficiency and customer satisfaction.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?