Invoice what does fob stand for

If you see this designation on an invoice you received, it indicates that the person or company who sent the materials to you was responsible for them until the point that occurs after "FOB" on the invoice. If your invoice says "FOB Shipping Point," the seller or shipper was only responsible for the goods until the point they began shipping.

If it says "FOB Destination" or uses your address or city in place of "Destination," the shipper was responsible for the goods until they reached you or your designated delivery address. In most cases, the responsibility for the goods really refers to their shipping cost.

If your invoice says "FOB [your address]" it means the shipping costs were included in the price listed on the invoice. Predominantly, these terms are used in commercial invoices. There are two types of free onboard freight: free onboard shipping point and free onboard destination. The costs associated with FOB include transportation of goods to the port, loading of goods, marine freight, insurance, unloading of goods at the destination port and transportation cost up to the final destination.

The FOB destination costs are collected in several ways. The FOB location terms, origin and destination, are qualified by modifiers. The modifiers decide the payment of transportation charges. The most common three modifiers are:. Both delivery and custom inspection are the responsibility of the buyer. Post a Job. Know Your Shipping Terms. Post a Job Are you a job seeker? Find jobs. What does FOB mean? When is FOB used?

Related terms FOB classifications can also be used in conjunction with other shipping terms that clarify additional details about costs: Freight Prepaid: the seller has agreed to pay for all transportation costs. Freight Collect: the buyer will pay for all transportation costs. How does FOB impact small businesses? What is FOB pricing? If you need to make an invoice for your business, you can do so using Bookipi Invoice.

Why is FOB on an invoice important? You can make as many invoices as you want for free! You may also like. What is invoice reconciliation? August 25, What are the different types of invoices?