Proforma Invoice: The Best Guide To Proforma Invoice And Its Uses [2022]

Proforma Invoice
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Proforma Invoice: The Best Guide To Proforma Invoice And Its Uses [2022]

A proforma invoice is a preparatory bill or anticipated invoice used to get payment from a committed customer for goods or services before they are delivered. A proforma invoice contains a description of the items, the total due amount, and other transactional information.

Invoicing might not be the most exciting aspect of the daily activities at work but its significance is indisputable as it helps to maintain the flow of cash that flows into your company.

Knowing the various kinds of invoices is essential in the creation of sound corporate practices for your business. This article was published to give you a brief overview of the proforma invoice, and how you can use it in your company.

In this article, I will help you know:

  • What is a proforma invoice?
  • What distinguishes a proforma invoice from a regular invoice, or a quotation?
  • How to use the proforma invoice

Most businesses deal with invoices in one way or the other. Whether the company is issuing the invoice itself or receiving invoices from suppliers.

Invoicing is, in the end, an essential aspect of managing a business. It allows you to be paid promptly and keep track of your expenses and earnings and also prepare your financials for tax time. What are proforma invoices?

What Is A Invoice Proforma?

You might be familiar with the phrase “proforma invoice” especially if you’re a business owner who is already proficient in the field of invoices.

For those who are still unsure, the proforma invoice is basically proforma invoice is essentially a provisional bill of sale that you send to your customer before you deliver your goods or services.

It usually includes the date of issue and a description of the item that is being offered, the amount to be paid, and any fees or taxes which may be incurred at the time of issue and the time when delivery occurs.

Proforma Invoice

The aim of the proforma invoice is to not expose your client to unanticipated costs or obligations.

A proforma invoice appears like an invoice. What makes them different, however, is the fact that a proforma invoice’s conditions of sale are able to be modified. This is why it is only applicable to sales that haven’t yet been finalized.

They also don’t contain a unique sequential invoice number. This is legally required on all invoices. They also should be clearly identified as proforma. In addition, a proforma bill is not a fiscal document and doesn’t contain an option to pay therefore it shouldn’t include in financial documents.

Invoices have specific requirements, however, an invoice proforma is more flexible and is editable

What Is Different Between A Proforma Invoice, A Quotation, And An Invoice?

On the surface, proforma invoices and quotations have quite a lot in common. They’re both used in the same manner and both offer information regarding the sale, and none are legally binding documents by themselves. The only difference is their function.


A quotation is sent to prospective customers who have expressed an interest in buying from your company. It’s much more informal than an invoice and typically sent in the beginning phases of the sale when the client first asks questions about the prices you offer.

It is important to note that a quotation is not a legal document that has any obligation or obligation to be based on it.

Much like a proforma invoice it is not a financial document and is able to either be accepted or rejected by the client or quickly be canceled with no consequences.

Proforma Invoice

Proforma invoices are also sent to a customer prior to the delivery of your goods or services provided, however, it is to be more binding and enforceable than a quote however it is not legally binding as a signed invoice.

Further details are given. There is also flexibility in terms of negotiations prior to the settlement being agreed upon.

Most of the time a proforma invoice is issued after the buyer has committed to the purchase, however, the specifics of the sale have yet to be verified (e.g. quantity).


Invoices are issued when products were purchased or services provided and the balance is due. An invoice is a legal contract that is binding on the buyer and puts them under the obligation of paying the price specified.

In contrast to proforma invoices, you are able to make use of invoices to claim VAT.

Therefore, in the end, you must prepare an invoice in proforma before the details are finalized and an invoice after the sale is completed.

When Should You Use A Proforma Invoice?

There are two primary reasons for your company to need a provisional bill of sale in advance of the actual sale. You may want to provide estimates of the cost of the product or service you’re offering or ship them internationally.

  • Cost Estimate

Proforma invoices function as an example of good faith contract that you sign with your client.

They provide a base for sales that provides a breakdown of products, with an accurate estimation of the amount to be paid – however, you’re not requesting payment.

Proforma invoices are an ideal solution for sales that haven’t been completed or the products or services are under discussion because you’re providing an invoice that is able to be later modified if needed.

  • International Shipping

Because they typically include information regarding packaging, shipping weight, weight, as well as delivery charges Proforma invoices are frequently employed in international shipping.

They aid in declaring the value of an item to ensure that it will pass through customs swiftly and be delivered to your client on time.

Read Also:

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Membership Invoice

What Does A Proforma Invoice Look Like?

There aren’t any particular requirements in the form of the proforma invoice. However, it is more secure and easier to make it look as close as possible to the structure of the invoices you make.

Therefore Proforma invoice templates usually contain:

  • The date of publication
  • Contact details for both buyers and seller
  • Information about the products or services, as well as the prices they are agreed upon.
  • VAT and any other applicable taxes
  • Shipping costs, if applicable
  • The total amount payable

If you’re still making your own invoices It’s not difficult to modify your invoice template to fit the requirements of an invoice proforma.

Be sure to identify the invoice as “proforma” and make sure it does not contain an invoice number, since it will transform what’s an informal document into an obligation. The date of payment and the exact date of delivery is not required.

How Can You Create A Invoice Proforma?

Although Microsoft Word and Excel provide invoice templates they need time and attention to detail to fill in the correct information.

Additionally, you could have issues later on in the selling process if you fill in inaccurate numbers on your invoices.

Invoicing Software is the most secure option for any company that wants fast and timely payment as well as fast and simple bookkeeping.

Although it’s a standard expression today, it’s not always true however, with the invoicing software, it is just two clicks to generate an invoice. It’s not a hassle to update or double-check the invoice number. It’s instant and automatic.

SumUp Invoices offers simple invoice templates that allow you to make an invoice and then send it out in under an hour. In addition, with everything automated, the invoices will be assured to be flawless.

It is crucial to the management of businesses in that a flawless invoice enhances professionalism, eases the process of paying, and helps keep your books up to date.


Proforma invoices aren’t always needed but can serve as a crucial part of the sales procedure. Though they’re similar to invoices and quotations proforma invoice is designed to serve a specific purpose and can be designed with the aid using invoice templates.

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