By presenting a proforma invoice, the seller indicates the willingness to proceed with the transaction upon receipt of the specified advance payment. Requesting Advance Payment - Sellers often use proforma invoices to request advance payments from buyers. They serve as a preliminary invoice that outlines the terms and conditions of the sale, ensuring a smoother delivery process for both parties. Product Delivery - Proforma invoices are typically issued when products are ready to be delivered. Issuing a proforma invoice ensures that both the buyer and seller are on the same page regarding the transaction terms. Streamlining the Sales and Purchase Process - Proforma invoices provide essential details to buyers, including delivery schedules, shipping details, product prices, and payment methods. 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. Whereas when the seller issues an invoice, it is essential to make the payment for the product delivered to the buyer.Ī proforma invoice is not a legal invoice, so the seller can not consider the proforma invoice as account receivable. However, the buyer can ask for the 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. The 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.

Simple proforma invoice template