Is a proforma invoice legally binding?

No. A proforma invoice is not a legally binding demand for payment. It is a courtesy document used to confirm the scope and pricing before the real invoice is issued. The final invoice, sent after delivery, is the legally binding document.

What is the difference between a proforma invoice and a quote?

They serve a similar purpose but a proforma invoice is formatted like an invoice (with invoice number, line items, and totals) while a quote is often a simpler document. Proforma invoices are especially common in international trade and customs.

When should I use a proforma invoice?

Use a proforma invoice when a client needs a formal document to arrange payment approval, apply for import/export licences, or process a purchase order — before you have actually delivered the goods or services.

How do I mark a proforma invoice?

Always write 'PROFORMA INVOICE' clearly at the top of the document — never just 'Invoice'. This prevents confusion with the final, payable invoice and ensures both parties understand its preliminary nature.

What Is a Proforma Invoice? (And When to Use One) | Invoice Generator Guide

Q: What is a proforma invoice?

A proforma invoice is a preliminary invoice sent before work is delivered or goods are shipped. It shows the expected cost, quantity, and terms but is not a demand for payment — it is a good-faith estimate or quotation in invoice format.

What Is a Proforma Invoice?

A proforma invoice is a preliminary invoice issued before goods are delivered or services are completed. It outlines the expected cost, quantity, and terms of a transaction — but unlike a standard invoice, it is not a demand for payment.

Think of it as an invoice-shaped estimate: it gives the buyer a clear picture of what they will owe, without obligating either party to the final transaction.

Proforma Invoice vs Regular Invoice

| | Proforma Invoice | Regular Invoice | |---|---|---| | Purpose | Estimate / pre-approval | Request for payment | | Legally binding | No | Yes | | When issued | Before delivery | After delivery | | Demand for payment | No | Yes | | Used in customs | Yes (common) | Less common |

When Should You Use a Proforma Invoice?

International trade and customs

Proforma invoices are widely used in import/export. Customs authorities may require a document showing the value of goods before they cross a border — even before the transaction is final.

Budget approval

When a client needs to get internal sign-off before committing to a purchase, a proforma invoice gives their finance team or procurement department the numbers they need.

Purchase order processing

Some organisations can only raise a purchase order (PO) against a formal document. A proforma invoice provides that document without creating an accounting liability.

Advance payments / deposits

If you require a deposit before starting work, a proforma invoice is the right document to request it with — since the full service hasn't been delivered yet.

How to Write a Proforma Invoice

A proforma invoice looks almost identical to a regular invoice. The key differences:

Label it clearly — write "PROFORMA INVOICE" at the top, not just "Invoice"
Use a proforma number — keep a separate numbering sequence (e.g. PRO-001) to distinguish from real invoices
Include an expiry date — state how long the pricing is valid (e.g. "This proforma is valid for 30 days")
Mark it 'Not a tax document' if required in your jurisdiction

Everything else — your details, client details, line items, totals, and payment terms — is the same as a regular invoice.

After the Proforma Invoice

Once the goods are delivered or the service is completed, issue a final invoice (or tax invoice) for the same amount. The final invoice is the legally binding payment request and replaces the proforma.