What is a proforma invoice?
A proforma invoice is a preliminary bill sent by a seller to a buyer before the actual delivery of goods or services. It is not a final demand for payment, but rather an estimate that shows the expected cost, terms, and details of the future transaction.
Unlike a regular invoice, a proforma invoice is not a legal accounting document for tax purposes in most countries. It is mainly used for:
- Getting buyer approval before starting work
- Customs clearance and international shipping
- Requesting advance payments
- Providing detailed quotes to clients
Proforma Invoice vs Tax Invoice
| Feature | Proforma Invoice | Tax Invoice (Final Invoice) |
|---|---|---|
| Purpose | Quotation / estimate | Official request for payment |
| Legal status | Non-binding | Legally binding |
| Used for tax purposes | No | Yes |
| When issued | Before delivery | After delivery |
| Can be changed | Yes | No |
When Do You Need a Proforma Invoice?
- International trade and customs clearance
- Advance payments from clients
- Large or custom projects
- When the client asks for a detailed cost breakdown before approving the order
- Export shipments
How to Make a Proforma Invoice
Creating a proforma invoice is quite simple. It should include:
- Your company name, address, and contact details
- Buyer’s name and address
- Proforma invoice number and date
- Valid until date (important!)
- Detailed description of goods or services
- Quantity, unit price, and total amount
- Estimated taxes and shipping costs
- Payment terms and currency
With ReadyInvoices.com, you can create a professional proforma invoice in under a minute.