If you've done business internationally or with larger corporate clients, you may have been asked for a "proforma invoice." It sounds intimidating, but it's a simple concept once explained clearly.
What Is a Proforma Invoice?
A proforma invoice is a preliminary bill of sale sent to a buyer before goods or services are delivered. It shows the buyer what they'll be charged, in detail, so they can arrange payment, financing, or import paperwork in advance. Unlike a regular invoice, it is not a demand for payment and has no legal requirement to be paid — it's a good-faith estimate of the final invoice.
Proforma Invoice vs Regular Invoice
| Feature | Proforma Invoice | Regular Invoice |
|---|---|---|
| Sent | Before delivery/completion | After delivery/completion |
| Legally binding? | No | Yes |
| Requests payment? | No (informational) | Yes |
| Can change later? | Yes, final invoice may differ slightly | No, this is the final amount |
| Used for | Customs, financing, advance approval | Actual payment collection |
When You'd Use a Proforma Invoice
- International trade: Customs authorities often require a proforma invoice to assess import duties before goods physically arrive.
- Large corporate clients: Procurement departments often need a proforma invoice to get internal budget approval before they can issue a purchase order.
- New client relationships: Sending a proforma invoice before starting work lets a cautious client confirm pricing and terms without any payment obligation yet.
- Securing financing: Buyers sometimes need a proforma invoice to apply for a loan or letter of credit to fund the purchase.
What to Include on a Proforma Invoice
Largely the same information as a regular invoice, plus a clear label:
- The words "PROFORMA INVOICE" prominently at the top
- Your business details and the buyer's details
- Itemised goods/services with prices
- Estimated shipping and taxes (for international trade)
- A validity date ("Prices valid until [date]")
- A note: "This is not a demand for payment"
Important: Because a proforma invoice isn't a legal demand for payment, you must still send a regular, final invoice once the goods are delivered or the work is complete — that's the document that actually triggers payment terms and is used for accounting records.
Proforma Invoice Example Workflow
- Client requests a quote for goods being shipped internationally
- You send a proforma invoice showing estimated price, shipping, and duties
- Client uses this to get internal approval or arrange customs paperwork
- Goods are shipped and delivered
- You issue the final, official invoice — which may have minor adjustments (actual shipping cost, final duty rates)
- Client pays the final invoice
Need to create a proforma or final invoice?
Just type 'PROFORMA INVOICE' as your title in our free invoice maker.
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