Milestone 6: From Purchase Order to Final Shipment – A Practical Export Execution Guide
Exporting does not end with finding a buyer.
The real challenge begins after the export order is confirmed.
Many first-time exporters struggle not because they lack buyers, but because they do not understand the step-by-step execution process — documentation, customs, logistics, payments, and compliance.
This blog explains Milestone 6 of the Export Roadmap:
What exactly happens from the moment you receive a Purchase Order (PO) until the shipment is delivered to the buyer.
This guide is written to help Indian exporters, MSMEs, manufacturers, traders, and e-commerce sellers execute export orders confidently and correctly.
Understanding the Export Execution Framework
To explain this milestone clearly, let us take a realistic export scenario:
- Product: Decorative items
- Destination: Germany
- Buyer: European home décor importer
- Incoterm: FOB (Indian Port)
- Payment Terms: 30% advance + 70% before shipment
Now let’s break the export journey into 13 practical steps.
Step 1: Receipt of Purchase Order (PO)
The export process formally begins when the buyer issues a Purchase Order (PO).
A standard PO contains:
- Product specifications
- Quantity
- Price and currency
- Incoterms (FOB, CIF, etc.)
- Delivery schedule
- Packaging requirements
- Inspection or compliance conditions
Once received, the exporter must review and confirm the PO via email to ensure mutual clarity on terms.
Step 2: Issuing the Proforma Invoice (PI)
The Proforma Invoice is the exporter’s official commercial offer based on the PO.
It typically includes:
- HS Code
- Unit price and total value
- Payment terms
- Incoterms
- Delivery timeline
- Validity period
The PI also serves as the basis for requesting advance payment.
Step 3: Receipt of Advance Payment
After the buyer accepts the PI, the agreed advance (usually 20–30%) is paid via:
- Bank remittance (TT / SWIFT)
- Export current account
- Online payment platforms (for e-commerce exports)
The bank issues a Foreign Inward Remittance Advice (FIRA), which is important for future compliance and remittance tracking.
Step 4: Production as per Buyer Specifications
Once advance payment is received, production begins strictly as per buyer requirements, which may include:
- Custom design or colour
- Private branding or labelling
- Export-grade packaging
- Fragile or moisture-resistant packing
Consistency with specifications is critical to avoid disputes and rejections.
Step 5: Quality Control and Inspection
Before dispatch, goods must undergo quality verification.
Depending on the buyer or product category, this may include:
- Pre-shipment inspection
- Packaging strength tests
- Dimension and weight checks
- Third-party inspection certificates
Quality compliance at this stage ensures smoother customs clearance and buyer confidence.
Step 6: Preparation of Export Documents
Accurate documentation is the backbone of export execution.
Common documents prepared include:
- Commercial Invoice and Packing List
- Certificate of Origin (if required)
- Insurance document (for CIF shipments)
- MSDS (for chemicals)
- Phytosanitary Certificate (for agricultural goods)
Incorrect or incomplete documentation can delay shipment and payment.
Step 7: Appointment of CHA / Freight Forwarder
A Customs House Agent (CHA) or Freight Forwarder is engaged to manage operational execution.
Their responsibilities generally include:
- Booking cargo space
- Arranging pickup from factory
- Handling customs procedures
- Container stuffing and sealing
- Coordination with shipping lines
The exporter provides all commercial and regulatory documents to the CHA.
Step 8: Filing of Shipping Bill on ICEGATE
The CHA files the Shipping Bill electronically on the ICEGATE portal along with:
- Invoice and Packing List
- IEC and GST details
- LUT/Bond, if applicable
Once filed, a Shipping Bill Number is generated, which is central to export customs clearance.
Step 9: Customs Examination and Let Export Order (LEO)
Customs authorities may:
- Examine the goods
- Verify HS Code and declarations
- Check labels and markings
- Draw samples, if required
If all conditions are met, customs issues the Let Export Order (LEO) — the formal approval allowing goods to be exported.
Step 10: Stuffing, Loading, and Issue of Bill of Lading
After LEO:
- Goods are stuffed into the container
- Container is transported to the port
- Cargo is loaded onto the vessel or aircraft
The carrier issues the Bill of Lading (BL) or Airway Bill (AWB), which acts as proof of shipment.
Step 11: Receipt of Balance Payment
Once shipment is completed, the exporter sends scanned copies of:
- Invoice
- Packing List
- Bill of Lading
- Certificate of Origin
- Insurance document (if applicable)
Based on these, the buyer releases the balance payment.
The bank then issues a Bank Realisation Certificate (BRC).
Step 12: Dispatch of Original Documents
Original documents are couriered to the buyer through international courier services.
These documents are required by the buyer for:
- Import customs clearance
- Payment of import duties
- Release of cargo at destination
Step 13: Shipment Delivered and Order Closed
Once the buyer receives the goods and payment is realised, the export order cycle is successfully completed.
This marks the final execution stage of an export transaction.
Key Export Terms – Short Form and Full Form
| Short Form | Full Form |
| PO | Purchase Order |
| PI | Proforma Invoice |
| HS Code | Harmonized System Code |
| TT | Telegraphic Transfer |
| FIRA | Foreign Inward Remittance Advice |
| CHA | Customs House Agent |
| ICEGATE | Indian Customs Electronic Gateway |
| LUT | Letter of Undertaking |
| LEO | Let Export Order |
| BL | Bill of Lading |
| AWB | Airway Bill |
| BRC | Bank Realisation Certificate |
| COO | Certificate of Origin |
Final Note
Executing an export order is not complicated — but it must be systematic.
When documentation, customs, logistics, and payments are aligned, exporting becomes a predictable and scalable business process.
This milestone completes the Export Execution Framework, helping exporters move from theory to real-world implementation.
For more practical guidance on exports, taxation, GST, and compliance for Indian businesses, stay connected with EtaxSave.
© Content by CA Devesh Thakur.
Reproduction or redistribution in any form is prohibited without prior written permission.
