Proforma Invoice Generator

What Is a Proforma Invoice?

A proforma invoice (also written as "pro forma invoice") is a preliminary document sent by a seller to a buyer before a sale is finalised or goods are shipped. It describes the intended transaction — the items, quantities, and estimated prices — but it is not a demand for payment.

Think of it as a detailed preview of the final invoice. It gives the buyer all the information they need to approve a purchase, arrange financing, or obtain import permits, without yet creating a formal obligation to pay.

Proforma Invoice vs. Commercial Invoice

These two documents look nearly identical but serve very different purposes:

When to Use a Proforma Invoice

Proforma invoices are appropriate in several common business situations:

International trade & customs

When shipping goods across borders, customs authorities typically require a proforma invoice to assess duties and taxes before the shipment arrives. It provides the declared value, country of origin, and description of goods.

Buyer purchase approval

Many companies — especially larger ones — require a proforma invoice so their finance or procurement team can approve a purchase before it is committed. The proforma allows them to raise an internal purchase order without the seller having created a final invoice.

Import permits and letters of credit

Buyers in some countries must apply for an import license or open a letter of credit at their bank before goods can be shipped. A proforma invoice gives them the official details they need to complete this process.

Pre-project cost confirmation

Service businesses (consultants, agencies, contractors) sometimes send a proforma invoice at the start of a project to confirm the expected fees. This is similar to a quote but follows invoice formatting that suits the client's procurement process. If you are deciding which document fits best before work starts, compare them in Quote vs Estimate vs Invoice.

Advance payment / deposit

Some businesses use a proforma invoice to request an upfront deposit before work begins or goods are produced. While this is technically closer to a standard invoice for a deposit, the "proforma" label signals the final invoice will follow on completion.

What to Include on a Proforma Invoice

A proforma invoice contains most of the same fields as a standard invoice. Label it clearly as "Proforma Invoice" (or "Pro Forma Invoice") at the top so it is never confused with a final payment request.

Required fields

• The words "Proforma Invoice" — prominently displayed
• Your business name, address, and contact details
• Buyer's name and address
• Proforma invoice number and date
• Itemised list of goods or services with quantities and unit prices
• Subtotal, applicable taxes, and estimated total
• Currency
• Estimated delivery date or project timeline
• Payment terms (e.g., "50% deposit required to confirm order")

For international shipments, also include

• Country of origin for each item
• HS (Harmonised System) tariff codes
• Incoterms (e.g., FOB, CIF, DAP)
• Shipping method and estimated shipping cost
• Your VAT/tax registration number (if applicable)

Because many proformas are used to request deposits or confirm prepayment, it also helps to define the timing clearly. See Invoice Payment Terms Explained for practical wording you can reuse.

Proforma Invoices in International Trade

Proforma invoices are especially important when exporting or importing goods across international borders. They serve as the primary document that allows customs, banks, and government agencies to process shipments before they arrive.

Customs valuation

Customs authorities in the destination country use the proforma invoice to determine the declared value of the goods, which is the basis for calculating import duties and taxes. The values on the proforma should match the final commercial invoice closely — significant discrepancies can trigger audits or delays.

Letters of credit (LC)

When a buyer's bank issues a letter of credit (a guarantee of payment), the bank uses the proforma invoice to verify the terms of the trade. The LC will specify that payment is released once the terms on the proforma are met and confirmed by the commercial invoice and shipping documents.

Import licenses

Some countries require buyers to obtain an import license for certain goods before shipment. The proforma invoice provides the official description and value needed to apply for the license.

Is a Proforma Invoice Legally Binding?

No. A proforma invoice is not a legally binding document and does not create a payment obligation for the buyer. It is an estimate or declaration, not a final invoice.

Key legal points to remember:

• A proforma invoice cannot be used to enforce payment in a court of law
• It should not be recorded as accounts receivable in your accounting system
• The buyer is under no obligation to proceed with the purchase after receiving it
• Only the final commercial invoice — issued after delivery — creates a legal debt

Because it is not legally binding, a proforma invoice also cannot be used as a VAT invoice. If you are VAT-registered, you must issue a proper VAT invoice (your final commercial invoice) once the goods or services are delivered.

Frequently Asked Questions

Can I use a proforma invoice to collect a deposit?

Yes, many businesses use a proforma invoice to request a deposit before starting work or producing goods. However, once a deposit is paid, you should issue a proper receipt or partial invoice to acknowledge the payment received.

Do I need to number proforma invoices?

Yes — always assign a unique reference number to each proforma invoice. This makes it easy to reference during buyer approval processes and to match to the final invoice. Keep proforma numbering in a separate sequence (e.g., PI-001) to avoid confusion with your invoice series.

Can a proforma invoice be converted into a final invoice?

Yes. Once the sale is confirmed and goods or services are delivered, you should issue a final commercial invoice — ideally referencing the proforma invoice number. You can use the same line items as the proforma, adjusted for any final agreed changes.

What if the final price differs from the proforma?

This is common, especially for services or custom orders. If the final price changes materially, communicate the change to your client before issuing the final invoice. For international shipments, significant differences between proforma and commercial invoice values can cause customs complications.

Is a proforma invoice the same as a quote?

They are similar but not identical. A quote is a formal offer to supply goods or services at a specific price, and can become legally binding if the client accepts it in writing. A proforma invoice is formatted like an invoice and is used more often in trade and procurement contexts. A quote is used more in service or project-based industries.

Create Your Proforma Invoice — Free

My Invoice Generator lets you create a professional proforma invoice in under two minutes — no account required, no watermarks, and completely free.

• Type "PROFORMA INVOICE" in the document title field
• Fill in your business details, client details, and line items
• Add a note: "This is a proforma invoice. A formal invoice will follow on delivery."
• Download as a polished PDF

Also see our related documents:

• Quote vs Estimate vs Invoice
• Invoice Payment Terms Explained
• How to Send an Invoice by Email
• Free Quote / Estimate Generator
• Free Receipt Generator
• Free Credit Note Generator
• Free Purchase Order Generator
• Complete Invoicing Guide