Proforma Invoice Explained: When You Need One Before Payment

A proforma invoice looks like a bill but usually is not one yet. It shows what you plan to charge, in invoice format, before goods ship or services start. Exporters use proforma documents for customs and buyer approval. Wholesalers send them so purchasing can open a PO. Agencies sometimes need invoice-shaped paperwork for budget holds even when work has not begun. Do not treat proforma as a tax invoice unless your accountant says otherwise. Label it clearly in the notes. Include line items, currency, shipping terms if relevant, and a valid-until date so prices expire. After the buyer approves, issue a standard invoice with a new number for payment and bookkeeping. Confusion often happens between proforma, estimate, and quote. Functionally they overlap in casual conversation. InvoDraft estimate templates handle preliminary pricing with expiry dates and line detail. You can note proforma in the header or notes field when a client requires that word on the document. When approval arrives, convert the estimate to a final invoice on Pro instead of retyping rows. Keep PDF copies for export records or procurement audits. Pair proforma workflows with contractor or consulting templates when deposits or international shipments are part of your business model.