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GlossaryLast updated July 25, 2026

What is a proforma invoice?

A proforma invoice is a preliminary bill sent before the work is done or the goods ship. It looks like an invoice and lists the same line items, but it is not a demand for payment and is not recorded in your accounts as a sale. Its job is to tell the buyer exactly what they will owe so they can approve it, arrange payment, or clear customs. The real invoice comes afterwards.

Proforma invoice vs a real invoice

The difference is legal and accounting rather than visual. A commercial invoice is a demand for payment: it creates a receivable, carries a unique invoice number, and belongs in your books. A proforma creates nothing — it is a commitment to a price, and you can revise it without a credit note.

That distinction is the whole reason the document exists. It lets both sides agree the figure before anyone is on the hook for it.

  • Proforma — issued before delivery, no payment due, not in your accounts, freely revisable
  • Commercial invoice — issued after delivery, payment due, recorded as revenue, corrected only with a credit note
  • Quote — the same information in a looser format; a proforma is simply a quote that looks like an invoice

What to put on one

Include everything the final invoice will carry, so the buyer can approve it without a second conversation. The one thing that must differ is the heading.

  1. The words "Proforma Invoice" at the top — not "Invoice"
  2. A proforma reference number, kept separate from your invoice number sequence
  3. Issue date, and a validity date after which the prices may change
  4. Your details and the buyer's, exactly as they will appear on the final invoice
  5. Line items with quantities and unit prices
  6. Any tax that will apply, shown as it will be charged
  7. Shipping terms and country of origin, if goods are crossing a border
  8. A line stating this is not a demand for payment — for example, "Proforma only. No payment is due against this document."

When you actually need one

Three situations account for most proformas. First, international shipping: customs authorities frequently require one to assess duty before goods arrive, and freight forwarders will ask for it by name. Second, buyers whose finance process needs a document to raise a purchase order against — a plain email quote will not clear their system. Third, advance payment, where the buyer pays before you deliver and needs something itemised to pay from.

Outside those cases a normal quote is usually enough, and dressing it up as a proforma mainly adds a step. If the client has not asked for one, they probably do not need one.

The mistake that causes accounting problems

Do not number proformas in the same sequence as your invoices. Invoice numbers are expected to be sequential and unbroken; if PRO-014 sits between INV-013 and INV-015, you have created a gap that an accountant or auditor will ask about. Use a separate prefix and counter.

The second common error is treating a paid proforma as the end of the process. If a client pays against a proforma, you still owe them a real invoice — that is the document their accounts and yours both need. Issue it once the payment lands or the goods ship. See how to invoice a client for the sequence.

More guides: How to invoice as a contractor · Invoice terms and conditions · What does net 30 mean? · Invoice vs. receipt: what's the difference? · The invoice email: what to write · A complete freelance invoice, annotated

Frequently asked questions

Is a proforma invoice legally binding?
Not as a demand for payment — the buyer owes nothing against it. It can still be evidence of an agreed price if both parties acted on it, so treat the figures as a commitment you intend to honour rather than an opening position.
Can a customer pay a proforma invoice?
Yes, and advance-payment arrangements work exactly this way. You must still issue a real commercial invoice afterwards, because that is the document that records the sale in both sets of books.
What is the difference between a proforma invoice and a quote?
Mostly formatting and expectation. Both are non-binding statements of price. A proforma is laid out like an invoice, which is what makes it acceptable to customs officials and to finance departments that need a document to raise a purchase order against.
Do I charge tax on a proforma invoice?
Show the tax that will be charged so the total is accurate, but you are not collecting it and it does not go in your return. Tax becomes due on the real invoice. Rules vary by country, so confirm with your accountant if you sell across borders.
Does a proforma invoice need an invoice number?
It needs a reference number, but keep it out of your invoice sequence — use a separate prefix such as PRO-001. Mixing them creates gaps in the invoice numbering that auditors will query.
Is a proforma invoice the same as a commercial invoice?
No. A commercial invoice is the final document that demands payment and records the sale. A proforma precedes it and does neither. Customs generally accepts a proforma to estimate duty but requires the commercial invoice for the actual clearance.