What Is a Proforma Invoice?
A proforma invoice is a preliminary invoice issued before goods are delivered or services are completed. It outlines the expected cost, quantity, and terms of a transaction — but unlike a standard invoice, it is not a demand for payment.
Think of it as an invoice-shaped estimate: it gives the buyer a clear picture of what they will owe, without obligating either party to the final transaction.
Proforma Invoice vs Regular Invoice
| | Proforma Invoice | Regular Invoice | |---|---|---| | Purpose | Estimate / pre-approval | Request for payment | | Legally binding | No | Yes | | When issued | Before delivery | After delivery | | Demand for payment | No | Yes | | Used in customs | Yes (common) | Less common |
When Should You Use a Proforma Invoice?
International trade and customs
Proforma invoices are widely used in import/export. Customs authorities may require a document showing the value of goods before they cross a border — even before the transaction is final.
Budget approval
When a client needs to get internal sign-off before committing to a purchase, a proforma invoice gives their finance team or procurement department the numbers they need.
Purchase order processing
Some organisations can only raise a purchase order (PO) against a formal document. A proforma invoice provides that document without creating an accounting liability.
Advance payments / deposits
If you require a deposit before starting work, a proforma invoice is the right document to request it with — since the full service hasn't been delivered yet.
How to Write a Proforma Invoice
A proforma invoice looks almost identical to a regular invoice. The key differences:
- Label it clearly — write "PROFORMA INVOICE" at the top, not just "Invoice"
- Use a proforma number — keep a separate numbering sequence (e.g. PRO-001) to distinguish from real invoices
- Include an expiry date — state how long the pricing is valid (e.g. "This proforma is valid for 30 days")
- Mark it 'Not a tax document' if required in your jurisdiction
Everything else — your details, client details, line items, totals, and payment terms — is the same as a regular invoice.
After the Proforma Invoice
Once the goods are delivered or the service is completed, issue a final invoice (or tax invoice) for the same amount. The final invoice is the legally binding payment request and replaces the proforma.