What Is a Proforma Invoice? Meaning, Uses and Example

A proforma invoice is a preliminary invoice sent to a buyer before goods are shipped or services delivered. It shows what the final invoice will look like (items, quantities, prices, shipping, terms) but it isn't a demand for payment in the accounting sense, and you don't record it as a sale.

"Pro forma" is Latin for "as a matter of form." The document exists to confirm the details in advance.

Why buyers ask for one

• To arrange payment in advance. If you require payment before shipping, the buyer needs something showing exactly what to pay.
• For internal approval. Their finance team may need a document before raising a purchase order.
• For import licenses or letters of credit. Banks and some customs authorities ask for a proforma to set up financing or permits.
• To declare value in advance. Buyers may use it to estimate duties.

What to put on it

A proforma should be as complete as the final invoice would be:

• The heading Proforma invoice (so nobody books it as a real invoice)
• A proforma number in its own series, e.g. PRO-0007
• Issue date and a validity date
• Seller's and buyer's names, addresses, and tax or import numbers where relevant
• Detailed description of goods, quantities, unit prices and totals
• Shipping cost, insurance and any other charges
• Incoterms (e.g. FOB, CIF, DAP) and the named place
• Payment terms, such as "100% by wire transfer before dispatch"
• Bank details for payment
• For goods: estimated weight, packaging, and country of origin help if it may be used for customs

Proforma vs commercial invoice vs final invoice

	Proforma invoice	Commercial invoice	Final (standard) invoice
When	Before shipment or sale	With the shipment	After supply
Purpose	Confirm details, request advance payment	Customs clearance	Request payment / record sale
Recorded as a sale?	No	Yes (often doubles as the invoice)	Yes
Legally an invoice?	No	Yes	Yes

A commercial invoice is the document customs uses to assess duties when goods cross a border. It's usually issued at dispatch with final details. See our commercial invoice guide.

Proforma vs quote

A quote and a proforma can contain nearly the same information. The difference is mostly purpose and timing: a quote is an offer the buyer may or may not accept; a proforma usually follows an agreement and is a step toward payment or shipment. In international trade, "proforma" is the term banks and customs brokers expect.

Example

PROFORMA INVOICE PRO-0007, Issued 12 August 2026, valid until 11 September 2026 Seller: Lakeshore Ceramics Ltd, Stoke-on-Trent, UK, VAT GB 000 0000 00 Buyer: Maison Bleue SARL, Lyon, France 240 × stoneware mugs, blue glaze, SKU LM-220 @ £6.40 = £1,536.00 60 × serving bowls, SKU LB-410 @ £14.00 = £840.00 Freight and insurance: £185.00 Total: £2,561.00 Incoterms: DAP Lyon. Payment: 100% by bank transfer before dispatch.

When the goods ship, the seller issues a commercial invoice with the final details and a real invoice number.

Accounting and tax

Because a proforma isn't an invoice, you don't record revenue or charge VAT on it. If the buyer pays in advance based on the proforma, how you handle VAT on that advance payment depends on your country's rules; in the UK and EU, receiving payment can itself create a tax point, which means issuing a proper VAT invoice. Ask your accountant how your country treats it.

Common mistakes

• Using the invoice number series for proformas. Unaccepted proformas then leave gaps in your invoices.
• No validity date. Prices and exchange rates move.
• Leaving off Incoterms. It's the most common source of argument about who pays for freight and insurance.
• Forgetting to issue the real invoice after payment and shipment.