A Proforma Invoice is a type of invoice that is issued by a seller to a buyer to confirm the details of a sale before the actual delivery or delivery confirmation. It is used to inform the buyer about the terms and conditions of the sale, including the price, quantity, description of goods or services, and payment terms.
Key Features of a Proforma Invoice:
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No Legal Binding: It is not a formal invoice and does not create a legal obligation for the buyer to pay. It is more of a confirmation of the transaction.
-
Used for Sales Confirmation: It is commonly used in international trade to:
- Confirm the details of the goods or services.
- Facilitate payment arrangements.
- Serve as a reference for the buyer to confirm the order.
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Not a Payment Instrument: It is not a payment receipt. It is not valid for payment purposes.
-
Includes Basic Information:
- Seller's details (name, address, contact info)
- Buyer's details (name, address, contact info)
- Description of goods/services
- Quantity
- Unit price
- Total amount
- Payment terms
- Date of issue
Example of a Proforma Invoice:
[Company Name]
[Address]
[City, State, ZIP Code]
[Country]
[Phone] | [Email]
[Buyer Name]
[Address]
[City, State, ZIP Code]
[Country]
[Phone] | [Email]
Proforma Invoice No.: 12345
Date: April 5, 2025
Description: 10 Units of Product A
Quantity: 10
Unit Price: $50.00
Total: $500.00
Payment Terms: Net 30 days
Currency: USD
This invoice is for informational purposes only and does not constitute a contract.When to Use a Proforma Invoice:
- When a seller is selling goods or services to a buyer in a foreign country.
- When a buyer is confirming the order before payment.
- When a seller is preparing for a shipment and needs to confirm the details.
Notes:
- In some countries, a Sales Invoice is used instead of a Proforma Invoice.
- A Bill of Lading is a document used in shipping, but it is different from a Proforma Invoice.
Let me know if you need a template or help with a specific scenario!