What is a Pro Forma Invoice: How to Use It?

What is a Pro Forma Invoice: How to Use It?

Entrepreneurs send customers a variety of financial documents every day, and a pro forma invoice is one of them. What is this document, and when is it issued? Read on to find out. In the following paragraphs, we will define pro forma invoice meaning and tell you how to create a proforma invoice using invoice generators.

A Pro Forma Invoice: What Is It?

A proforma invoice is a financial document that secures a prior agreement to provide goods and services in exchange for cash or its equivalent. Unlike a commercial invoice, pro forma determines that the deal is not final. The customer has the right to change the quantity and types of goods.

A Proforma invoice is not an official document or legally binding paper. Therefore, the customer can cancel the purchase even after receiving the proforma invoice. Such an invoice also does not fix the tax moment of the transaction. Thus, the tax point is the date written on the final invoice. It is the date that should be indicated when completing a tax declaration.

In other words, a proforma meaning is a preliminary estimate. This document confirms that the seller intends to send the goods at a pre-agreed price. However, such an invoice is quite flexible and can be adjusted.

What is a proforma invoice used for? This document is necessary for the customer to get acquainted with the cost of goods. The proforma invoice is then used to prepare a commercial or final invoice. In addition, this kind of invoice is written when goods are provided free of charge: for participation in auctions, exhibitions, or as humanitarian aid.

Advice On How To Create a Pro Forma Invoice

Let’s turn to how to make a proforma invoice. The first way is to draw up a document by yourself, using an example of proforma invoice. If you decide to write your own one from scratch, make sure that it contains the following information:

  • The title “proforma invoice”
  • business name and payment information of the seller
  • Date when issued and due date
  • Contacts of the buyer
  • List of products, their quantity, and description
  • Price of goods
  • Price validity period
  • Tax rate and amount
  • Note that it is not a tax invoice
  • Currency and payment method
  • Total cost of the invoice

For those who want to save time filling out paperwork and reduce the risk of errors, fillable forms can become a smart alternative. Invoice Maker by Saldo Apps offers a professional-looking proforma invoice template that is easy to fill out and customize. To send an invoice, enter the required data into the form fields, then add your logo and notes. After you write down the cost of the items and delivery, discount rate, and tax, the final amount will automatically appear in a particular cell. Now your proforma is ready to be sent by email, printed, attached to the package, or used for internal calculations.

Hope you now understand all about the proforma invoice and its purpose. Impress your clients with exceptional customer service and generate your first proforma with the instructions above.


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