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Key takeaways
- A proforma invoice is a preliminary document that shows price, quantity and terms before the sale is final. It is not a demand for payment.
- Buyers ask for one to arrange advance payment, a letter of credit, an import permit or an internal budget approval.
- The numbers on the proforma and the later commercial invoice should match, or customs and your bank will ask why.
- Do not book it as a sale or a bill. Neither side records it in the accounts.
Free PDF and Excel: Proforma invoice template and checklist. Get it below
What a proforma invoice is
A proforma invoice is a document a seller sends before goods ship or work starts. It states what the buyer would pay, on what terms, but it is a preview and not a bill.
Think of it as a promise written down with prices attached. The seller is saying: if you confirm, this is what the final invoice will say. Nothing is owed yet, nothing is recorded in the sales ledger, and the buyer cannot claim input tax on it.
Most of the time it shows up in cross-border orders and in any deal where money moves before goods do. A buyer's bank wants to see it before it sends an advance wire. A customs agent asks for it to estimate duty. A finance head asks for it before approving a purchase that has no contract yet.
A packaging buyer in Pune orders 4,000 printed cartons from a supplier in Vietnam. The supplier wants 30 percent up front. The buyer's bank will not release a foreign remittance without paperwork, so the supplier sends a proforma invoice with the carton specification, unit price, total, the 30 percent deposit and the bank details.
The bank approves the wire. Six weeks later the cartons ship, and the supplier issues a commercial invoice with the same unit price and a new invoice number. The finance team matches the two and nothing is queried.
What goes on a proforma invoice
| Field | What goes in it | Why it matters |
|---|---|---|
| Title | The words Proforma Invoice in large type, so nobody mistakes it for a bill. | A clear title stops the buyer paying it twice or booking it as a payable. |
| Proforma number and date | Its own number series, such as PI-2026-0142, and the issue date. | Reusing the final invoice number later causes duplicate-number errors in accounting. |
| Valid until | The last date the price holds, often 15 or 30 days out. | Protects the seller from raw material or currency moves. |
| Seller and buyer details | Legal names, addresses, tax or registration numbers, contact person. | Banks and customs match names letter for letter. |
| Description of goods | What is being sold, with model or part number, specification and HS code for exports. | The HS code drives the duty estimate. |
| Quantity, unit price, total | Each line priced, with a subtotal and any discount. | Lets the buyer compare it to the purchase order line by line. |
| Currency | The currency of the price and the payment. | A missing currency is the most common reason a bank bounces the document. |
| Incoterm and delivery place | For example FCA Hanoi or DAP Pune, with the named place. | Decides who pays freight and carries the risk. See trade terms. |
| Payment terms and deposit | What is due now, what is due later, and by what method. | Spells out the advance so the bank knows the exact amount to release. |
| Bank details | Beneficiary name, bank, account number and SWIFT or IFSC code. | Confirm these by phone. Fake bank-detail changes are a common fraud. |
| Reason for issue | A line such as: issued for advance payment, not a tax invoice. | Makes the purpose plain to anyone who reads it later. |
Free PDF and Excel
Proforma invoice template and checklist
A one-page proforma invoice you can fill in and send, plus a checklist of what banks and customs look for.
- Print-ready proforma invoice layout
- Field guide with why each line matters
- Pre-send checklist
- Editable Excel version with automatic totals
Proforma invoice, quotation and commercial invoice
| Document | Binding on the seller? | Goes into the accounts? | Used for |
|---|---|---|---|
| Quotation | Only while it is valid and if the buyer accepts | No | Pricing a possible sale |
| Proforma invoice | Usually treated as the seller's firm offer once the buyer accepts it | No | Advance payment, bank and customs paperwork |
| Commercial invoice | Yes, it is the final bill | Yes | Payment, customs clearance, tax records |
If you want the long version of each pair, read quote versus invoice and proforma versus commercial invoice. The short rule: a proforma tells the buyer what is coming, and the commercial invoice tells the tax office what happened.
When to ask for one, and when not to
- Ask for one when you are paying before delivery. A deposit with no paper behind it is a fraud risk and an audit finding.
- Ask for one when your bank, a licence authority or customs needs to see the deal before the goods move.
- Ask for one when your budget holder will not sign without a priced document, even if no purchase order exists yet.
- Do not ask for one on routine domestic orders you already cover with a purchase order and payment terms. It adds a document nobody needs.
Mistakes that stall payments
- Calling it an invoice and adding tax as if it were final. Tax invoices have their own legal fields, and a proforma cannot stand in for one.
- Different prices on the proforma and the commercial invoice. Customs can read a gap as under-valuation.
- No expiry date. A price quoted in March and honoured in October is a gift to one side.
- Skipping the incoterm. Two weeks later nobody remembers who agreed to pay the freight.
- Paying against bank details copied from an email without a call back. Do the call back.
- Title says Proforma Invoice and it carries its own number.
- The valid-until date is on it.
- Names and tax numbers match the contract and the purchase order.
- Every line has a quantity, a unit price and a currency.
- The incoterm names a place, not just three letters.
- The deposit amount and the due date are written out.
- Bank details were confirmed by a second channel.
- Finance knows it is not to be booked as a payable.
Last checked: 19 October 2026. Tax treatment of advance payments differs by country. Ask your tax adviser before you pay against a proforma across a border.
Frequently asked questions
Is a proforma invoice legally binding?
Not by itself in most places. It usually works as the seller's offer, and if the buyer accepts it and pays, it becomes strong evidence of the agreed terms. Say so in the contract if it matters.
Can I claim tax credit on a proforma invoice?
No. A proforma is not a tax document. The buyer claims input tax on the final tax invoice, so wait for that.
Do I pay a proforma invoice?
You pay it only if the deal calls for payment in advance. Otherwise you wait for the final invoice. Read the payment terms before you release money.
Does customs accept a proforma invoice?
Some customs offices take it for samples, pre-clearance or duty estimates. For normal clearance they ask for the commercial invoice. Check with your broker.
How long is a proforma invoice valid?
Whatever the seller writes in the valid-until line. Fifteen to thirty days is common, and shorter for goods with moving raw material prices.