What is a Proforma Invoice?
A proforma invoice is a preliminary invoice sent to a buyer before the final invoice. It describes the goods or services that will be provided, the estimated costs, and the terms of the sale. The word "proforma" means "as a matter of form" — it's a document issued as a formality or preview rather than a final billing statement.
Proforma Invoice vs Regular Invoice: Key Differences
The key differences between a proforma invoice and a standard invoice:
- •A proforma is not a demand for payment — a regular invoice is
- •A proforma is issued before delivery — a regular invoice after
- •A proforma can change based on actual delivery — a regular invoice is final
- •A proforma is clearly labeled "PROFORMA INVOICE" at the top
- •A proforma doesn't create a legal obligation — a regular invoice does
When to Use a Proforma Invoice
Use a proforma invoice when:
- •A buyer needs to arrange financing or get approval before committing
- •The order requires a letter of credit from a bank
- •You're shipping goods internationally and need a customs declaration document
- •You want to confirm the details of an order before producing a final invoice
- •A client needs a budget estimate to get internal sign-off on a purchase
- •You're quoting a project where the final cost may change slightly
Proforma Invoices in International Trade
Proforma invoices are especially common in international trade. When shipping goods across borders, customs authorities often require a proforma invoice to assess import duties and taxes before the shipment clears customs. It serves as the commercial document declaring the value and nature of the goods.
How to Create a Proforma Invoice
Creating a proforma invoice is identical to creating a regular invoice — same layout, same fields. The only differences are: label it "PROFORMA INVOICE" (not "Invoice"), include an expiry date (e.g., "This proforma is valid for 30 days"), and note that it's not a payment request. Use Magic Invoice to create the invoice and add "PROFORMA" to the invoice number or title.
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Create Free Invoice →Frequently Asked Questions
Is a proforma invoice legally binding?
No — a proforma invoice is not legally binding. It's a preview of the expected transaction. The legally binding payment request is the final invoice issued after delivery.
Does a proforma invoice require payment?
Not automatically. A proforma invoice is informational — it shows what the buyer will owe. However, some businesses require payment of a proforma invoice before beginning work (essentially using it as a deposit invoice).
How do I create a proforma invoice?
Create a regular invoice in Magic Invoice and add "PROFORMA" to the invoice title or number. Include a note that it's a preliminary document and not a final invoice. Download as PDF and send to your client.