Proforma invoice meaning
A proforma invoice is a preliminary billing document. It shows expected goods, services, prices, taxes, shipping, and terms before the final invoice is created.
It is often used when the buyer needs a cost estimate, internal approval, customs information, or payment request before goods are shipped or work is completed.
How it differs from a final invoice
| Document | Purpose | Timing |
|---|---|---|
| Proforma invoice | Shows expected charges before final billing | Before sale completion or delivery |
| Final invoice | Requests actual payment for completed or confirmed goods and services | After sale confirmation or delivery |
| Quote or estimate | Shows a proposed price that may still change | Before agreement |
When to use one
- A customer needs approval before committing to a purchase.
- A shipment needs a value estimate before final customs documents are prepared.
- A project requires a deposit before work begins.
- The final quantity, delivery cost, or tax amount may still change.
- You want to clarify costs before issuing a final invoice.
What to include
Include seller and buyer details, a clear title such as "Proforma Invoice", a unique reference number, itemized goods or services, estimated totals, currency, validity date, and any terms that explain what may change.
If the document is not a tax invoice or final invoice, make that clear in the title or notes so the customer understands its status.