Here are some of the reasons to use a proforma invoice in the business.ĭetailed Information - A proforma is similar to the invoice, so it becomes easy for the customer to know what to expect from the seller. Why use a proforma invoice for your business?Ĭreating a proforma invoice helps both the parties to get the information about the transaction that takes place in the future. Proforma invoice is used by the seller asking for the advance payment. Primarily it is used when the product is to be delivered so that the delivery process can be more straightforward for both parties.

The buyer can quickly know when the product will get delivered, shipping details, price of the product, payment mode, etc. Proforma invoice helps both the buyer and seller to streamline the sales and purchase process. When should a proforma invoice be issued? An invoice is issued before the payment is made, asking for the payment. Proforma invoice is issued before the product is delivered or asking for the advance payment or half payment. The buyer can not consider the proforma invoice as account payable. Proforma invoice is not a legal invoice, so the seller can not consider the proforma invoice as account receivable. Whereas when the seller issues an invoice, it is essential to make the payment for the product delivered to the buyer. However, the buyer can ask for an advance payment. When a proforma invoice is issued, the client doesn't need to make the payment. In contrast, an invoice is a legal document. Proforma invoice is not a legal document. Both documents have similar information, but still, there are some significant differences. At the same time, an invoice is sent by the buyer to the client after the product is delivered. What is the difference between a proforma invoice and an invoice?Ī proforma invoice is a non-legal document issued by the seller committing to delivering the product at a specified date and time. It holds all the information related to the goods or services including tax, commission, discounts, shipping details, and shipping cost.Īs a proforma invoice is just an estimated document, it is not a true invoice and is also generally issued before the tax bill. Proforma Invoice - What is a proforma invoice?Ī proforma invoice is a document sent by the seller outlining the intention to deliver the goods or services to the customer at an estimated price.

Proforma invoice template excel