# Proforma Invoice


A proforma invoice is a preliminary bill sent before goods ship. It tells the buyer what they will be charged: items, quantities, prices, freight, and terms. It is not a demand for payment and is not booked as a receivable. Buyers use it to approve a purchase, arrange prepayment, open a letter of credit, or estimate import costs.

## When sellers issue a proforma invoice

A proforma invoice comes before the sale is final, when the buyer needs a firm number to act on.

- The buyer must prepay or pay a deposit before production or shipment.
- The buyer needs internal approval or a purchase order raised against a firm price.
- An importer needs to open a letter of credit or apply for an import license.
- Customs or a freight forwarder needs an estimate of the shipment's value in advance.

## Proforma vs commercial invoice vs invoice

The three documents look alike but do different jobs.

|  | Proforma invoice | Commercial invoice | Invoice |
| --- | --- | --- | --- |
| Sent | Before shipment | With an international shipment | After shipment or delivery |
| Demands payment | No | Yes, for export sales | Yes |
| Booked as receivable | No | Yes | Yes |
| Main use | Quote, prepayment, approval | Customs clearance and duty | Billing and payment |
| Can change | Yes, until the sale is final | No | Only by credit or debit memo |

## What a proforma invoice includes

Include everything the final invoice will carry, and label it clearly so no one pays or books it by mistake.

- The words Proforma Invoice at the top
- A proforma number and date, plus an expiry or validity date
- Seller and buyer details
- Item descriptions, quantities, unit prices, and totals
- Freight, insurance, and other charges
- Payment terms and delivery terms, such as Incoterms
- For exports: HS codes, country of origin, and estimated weights

## From proforma to final invoice

Once the buyer accepts the proforma and the goods ship, the seller issues a standard or commercial invoice with its own invoice number. Any prepayment received against the proforma shows as a payment on that final invoice. If quantities or prices changed in the meantime, the final invoice reflects what actually shipped, not the proforma.

## FAQ

### Is a proforma invoice a legal document?

A proforma invoice is a good-faith statement of what will be billed, but it is not a demand for payment and is not recorded as a receivable. The final invoice is the binding request for payment.

### Do you pay a proforma invoice?

Sometimes. When the seller requires prepayment, the buyer pays against the proforma, and the payment is applied to the final invoice once the goods ship.

### Can a proforma invoice be used for customs?

Some countries accept a proforma invoice when the commercial invoice is not yet available, often with a requirement to submit the commercial invoice later. Check with the customs broker for the destination country.

## Sources

- [International Trade Administration: Pro Forma Invoice](https://www.trade.gov/pro-forma-invoice)