What Is a Proforma Invoice and How to Make One
A proforma invoice is a preliminary bill sent before the work is done or the goods are shipped. Here is what it is for, how it differs from a normal invoice and how to make one.
A proforma invoice is a preliminary invoice sent to a buyer before goods are shipped or services are delivered. It shows what the final invoice will look like: the items, quantities, prices, taxes and terms. It is not a demand for payment and it is not recorded as a sale, but buyers often use it to approve a purchase, arrange payment upfront or clear customs.
When do you use a proforma invoice?
- Requesting payment in advance: the client pays a deposit or the full amount before you start.
- Purchase approval: the buyer's company needs a document to sign off the spend.
- International shipping: customs may need a proforma to estimate duties before goods arrive.
- Letters of credit and finance: banks may ask for one before releasing funds.
- Confirming details: both sides check prices and quantities before the deal is final.
Proforma invoice vs invoice vs quote
| Quote | Proforma invoice | Invoice | |
|---|---|---|---|
| Sent | Before agreement | After agreement, before delivery | After delivery |
| Purpose | Offers a price | Confirms the deal in invoice form | Requests payment |
| Legally binding | No | No | Yes |
| Recorded in accounts | No | No | Yes |
What to include on a proforma invoice
- The title "Proforma Invoice", so it cannot be mistaken for a final invoice
- Your business details and the buyer's details
- A proforma number and issue date
- A description of the goods or services, with quantities and prices
- Any tax, shipping and discounts
- The estimated total
- Payment terms, such as a deposit due before work starts
- How long the proforma is valid, for example 30 days
- For exports: weight, country of origin and shipping terms if customs need them
Is a proforma invoice a VAT invoice?
No. In the UK a proforma invoice is not a valid VAT invoice, so the buyer cannot use it to reclaim VAT. Many businesses add the line "This is not a VAT invoice" to make that clear. Once the goods or services are supplied, send a proper invoice. Rules differ by country, so check with your tax authority if you are unsure.
How to make a proforma invoice for free
- Open the free invoice generator.
- Set the document title to Proforma Invoice.
- Add your details, the buyer's details and the line items.
- Write your payment terms and how long the proforma is valid.
- Download the PDF and send it.
When the job is delivered, click Duplicate, change the title to Invoice, check the details and send the final invoice with a new invoice number.
After the proforma: the final invoice
A proforma does not replace the real invoice. Once the work is done or the goods ship, issue a final invoice with its own invoice number and the actual amounts. If the client paid in advance, show that payment on the final invoice so the balance due is zero, and keep both documents with your records. For help with numbering, see how to number invoices.
Frequently asked questions
Is a proforma invoice legally binding?
No. A proforma invoice is a preliminary document that confirms the expected terms of a sale. The final invoice is the binding request for payment.
Can I pay against a proforma invoice?
Yes. Many buyers pay a deposit or the full amount against a proforma before goods ship. A final invoice is then issued showing the payment.
Does a proforma invoice need an invoice number?
It should have its own reference number, often with a different prefix such as PF, so it is not confused with your final invoice sequence.
What is the difference between a proforma invoice and a quote?
A quote offers a price before the buyer agrees. A proforma invoice is sent after the buyer agrees, laid out like an invoice, but before delivery.
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