What is a pro forma invoice?

"Pro forma" means "as a matter of form". It looks like an invoice, but it is a preview of one.

Why a pro forma invoice matters

It is used when the buyer needs a document before the goods move. Common reasons are:

• The buyer wants to pay in advance, and needs something to pay against.
• The buyer needs to apply for an import licence or arrange funding.
• Customs or a bank asks for a document that describes the shipment.
• The buyer wants to check the full cost, including freight, before confirming.

Requirements differ by country and by bank, so ask the buyer what their side needs.

What a pro forma invoice contains

It looks much like a normal invoice:

• Seller and buyer details
• A document number and date, marked clearly as "pro forma"
• Product descriptions, quantities and unit prices
• Freight, packaging and tax, where they apply
• The total, the currency and payment terms
• The delivery terms, such as an Incoterm

Pro forma invoice versus the other documents

A sales quote offers a price. A pro forma invoice is sent after the buyer has said yes, or nearly so, and prepares the payment or paperwork. A sales order records the accepted deal. The final commercial invoice is the real bill, issued when the goods ship or as the terms say.

So the order is usually: quote, then sales order, then pro forma if the buyer needs one, then the final invoice. Some sellers send the pro forma straight after the quote.

An example from product sales

A pigment maker agrees to sell 500 kg to a new customer abroad. The customer's bank needs a document before releasing payment, so the maker sends a pro forma invoice listing the product, quantity, price and delivery terms. The customer pays, the pigment ships, and the maker then issues the final invoice for the same amounts.

Related terms

• Sales quote: the offer that comes first.
• Sales order: the record of the accepted deal.
• Purchase order: the buyer's own order document.
• Incoterms: the delivery terms often printed on it.

How PromptLab handles it

In PromptLab the invoice is created from the sales order, so the quote, the customer's price list, the order and the invoice sit together and the figures match what the buyer agreed. If a buyer asks for a pro forma before you ship, keep the one you send as a file on the account, next to the deal.

Frequently asked questions

Is a pro forma invoice a legal document?

It is a commercial document, but it is not a demand for payment in the way a final invoice is. Its legal effect depends on the terms and on local rules, so check with your adviser if it matters.

Is a pro forma invoice the same as a quote?

No. A quote is an offer made before the buyer decides. A pro forma invoice is sent once the sale is agreed or nearly agreed, to prepare payment or paperwork.

Can a buyer pay against a pro forma invoice?

Yes, and that is a common use. Many sellers ship only after payment against a pro forma, particularly with new customers.

Does a pro forma invoice go in the accounts?

Usually not. It is a preview, and the sale is recorded when the final invoice is issued. Ask your accountant how your business treats it.