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In most cases, a proforma invoice is issued after the customer has committed to the purchase, but the final details of the sale are yet to be confirmed (e.g. More detail is provided, and there is room for manoeuvre in terms of negotiation before any payment is made. Crucially, a proforma invoice has no fiscal value and does not contain a means of payment, so it should not be included in your accounting records.Ī proforma invoice is also sent to a customer before your products are delivered or your services provided, but it is considered more binding than a quotation – although not legally binding like a completed invoice.
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They also do not have a unique, sequential invoice number – something that is required on all legal invoices – and must be clearly labelled as proforma. This means that it only applies to sales that have not yet been completed. What differentiates the two, however, is that a proforma invoice’s terms of sale can still be changed. The goal of a proforma invoice is to avoid exposing your customer to any unanticipated charges or duties.Ī proforma invoice looks very similar to an invoice. It typically contains a date of issue, a description of what is being sold, and the total amount payable as well as any taxes or fees that may be incurred between the time of issuing and when the delivery is made.
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But for those of you left still scratching your heads, a proforma invoice is essentially a provisional bill of sale that you send to your customer before you deliver your goods or services. You may be familiar with the term ‘ proforma invoice’, especially if you’re a business owner already adept in the world of invoices. Enable it today and send invoices for free! You only pay a 2.5% transaction fee on each invoice paid through the online payment link. Looking for a quick and easy invoice template? Create professional, tax-compliant invoices in under a minute with SumUp Invoices.