What Is a Proforma Invoice?

Proforma Invoice Explained

A proforma invoice (from the Latin pro forma, meaning "for the sake of form") is a document sent to a buyer before a transaction is finalised. It details the expected goods or services, quantities, prices, and terms — but it is not a request for payment.

Proforma invoices are used to:

• Give the buyer a clear picture of costs before they commit
• Support international shipping and customs declarations
• Help buyers arrange financing or foreign currency
• Serve as a basis for the final commercial or tax invoice

What Should a Proforma Invoice Include?

A well-structured proforma invoice contains:

1. The heading "Proforma Invoice" — clearly distinguishing it from a tax invoice
2. Your business name and address
3. The buyer's name and address
4. A proforma invoice number (e.g. PI-001)
5. Date of issue
6. Description of goods or services — including quantities and unit prices
7. Total amount — in the agreed currency
8. Validity period — how long the pricing is guaranteed (e.g. "Valid for 30 days")
9. Delivery and payment terms — such as Incoterms for international trade

Proforma Invoice vs Standard Invoice

When to Use a Proforma Invoice

Send a proforma invoice when:

• A client requests a formal cost breakdown before committing
• You are shipping goods internationally and need customs documentation
• The buyer needs the document to arrange a letter of credit or payment in advance
• You want to confirm pricing and terms before starting work

Do not use a proforma invoice when:

• The work is already complete — issue a standard invoice instead
• You need to collect payment — a proforma is not a demand for payment

Creating a Proforma Invoice

You can create a proforma invoice using the same tools you use for standard invoices. Just ensure the document is clearly labelled and uses a separate numbering sequence.