Proforma invoice format
A proforma invoice is a preliminary bill sent before the goods or services are delivered. It shows the buyer what they will be charged, but it is not a tax invoice and does not ask for payment in the legal sense.
When to use a proforma invoice
- To ask for an advance payment before you start the work or ship the goods
- For customs and import permits, where the buyer needs the value in advance
- When the buyer needs approval from their own company or bank before ordering
What to put on it
A proforma looks like an invoice: your details and the buyer's, a reference number, the date, items with quantities and prices, tax and the total. Add a validity date and the payment terms. Write Proforma Invoice clearly at the top, so nobody treats it as a final invoice.
Proforma invoice vs tax invoice
The buyer cannot claim GST or VAT on a proforma invoice, and it is not entered as a sale in your accounts. When the goods or services are delivered, issue a proper tax invoice with a new invoice number.
Questions people ask
Is a proforma invoice the same as a quotation?
They are close. A quotation is sent to win the order; a proforma is usually sent once the buyer has agreed, to confirm the details and collect any advance.
Can I claim input tax credit on a proforma invoice?
No. Tax credit needs a proper tax invoice issued for the actual supply.