Definition
A proforma invoice is a preliminary bill sent before goods or services are delivered that shows the expected items, prices, and terms. It is not a demand for payment or a tax document. Buyers use it for internal approval, customs declarations, or to arrange a deposit before the final invoice is issued.
Also called: Pro forma invoice, Preliminary invoice
Proforma invoice in practice
Proforma invoices look like regular invoices but are clearly labeled "Proforma" and sit outside your official invoice numbering sequence. Because no sale has been completed, they are not recorded as revenue or as receivables.
They are common in international trade, where customs authorities need a declared value before shipment, and in business-to-business sales where a purchasing department needs a formal document to approve spending.
Once the buyer confirms, the seller delivers and issues a final commercial invoice. That final invoice is the one recorded in the books and used for tax purposes.
Example
A furniture maker sends a proforma for a $6,000 custom table so the client can get budget approval. After approval and delivery, the maker issues invoice INV-0108 for the same amount.
Frequently Asked Questions
Is a proforma invoice legally binding?
No. It is a good-faith statement of expected costs and terms, not a request for payment or a contract. The binding document is the final invoice issued after delivery, or a separately signed agreement.
Should I pay a proforma invoice?
Only if the seller has asked for a deposit or prepayment against it. Otherwise wait for the final invoice, which will have an official invoice number and reflect exactly what was delivered.
Does a proforma invoice need a number?
Give it a reference for tracking, but keep it outside your official sequence so it is not mistaken for a tax invoice. Many businesses use a prefix such as PF-001.