Proforma Invoice

What is Proforma Invoice?

A Proforma Invoice is a preliminary bill that is sent to the buyer before the actual goods or services are delivered. It serves as a quotation, providing detailed information about the products or services, including their description, quantity, price, and terms of sale. Unlike a regular invoice, a Proforma Invoice is not a request for payment, but rather a document that helps both the buyer and the seller to understand the costs involved and agree upon the terms of the transaction. It acts as a binding agreement and can be used for various purposes, such as applying for a letter of credit or obtaining customs clearance for export or import.

What are the types of Proforma Invoice?

Proforma Invoices can be classified into different types based on their purpose and the type of transaction. Some common types include: 1. Commercial Proforma Invoice: This type of Proforma Invoice is used in regular commercial transactions and includes all the necessary details of the goods or services being sold. 2. Export Proforma Invoice: This type of Proforma Invoice is specifically used for export transactions and includes any additional information required for customs or international shipping. 3. Service Proforma Invoice: Service-based businesses often use this type of Proforma Invoice to provide a detailed breakdown of the services to be provided and their associated costs. 4. Proforma Invoice for Customs: This type of Proforma Invoice is used in international trade to help determine the customs duties and taxes that may be applied to the goods being imported or exported. These are just a few examples, and the type of Proforma Invoice required may vary depending on the specific circumstances of the transaction.

Commercial Proforma Invoice
Export Proforma Invoice
Service Proforma Invoice
Proforma Invoice for Customs

How to complete Proforma Invoice

Completing a Proforma Invoice may seem daunting, but with the right guidance, it can be a straightforward process. Here are the steps to follow:

01
Start by including your business name, address, and contact information at the top of the document.
02
Provide the recipient's information, including their name, address, and contact details.
03
Add a unique Proforma Invoice number and the date of issuance for reference.
04
Include a clear and concise description of the goods or services being provided. Be as detailed as possible to avoid any misunderstandings.
05
Specify the quantity, unit price, and any applicable discounts or taxes for each item or service.
06
Calculate the subtotal and include it in the invoice, along with any additional charges such as shipping or handling fees.
07
Provide the total amount due, including all charges and taxes.
08
Include your payment terms, such as the due date and accepted payment methods.
09
Clearly state any additional terms or conditions that apply to the transaction, such as return policies or warranties.
10
Review the completed Proforma Invoice for accuracy and completeness before sending it to the recipient.

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Video Tutorial How to Fill Out Proforma Invoice

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Questions & answers

What Is the Difference Between an Invoice and Proforma Invoice? While an invoice is a commercial instrument that states the total amount due, the proforma invoice is a declaration by the seller to provide products and services on a specified date and time.
A seller can create a proforma invoice anytime at the request of the buyer, so both parties know exactly what to expect from one another.
A proforma invoice is issued when a seller has discussed the preliminaries of a sale with the buyer but cannot proceed to send an official invoice since the final details of the deal aren't confirmed by the buyer yet. A proforma invoice can be issued to let the buyer know what exactly to expect from the seller.
A pro forma invoice is a quote in an invoice format that may be required by the buyer to apply for an import license, contract for pre-shipment inspection, open a letter of credit or arrange for transfer of hard currency.
A proforma invoice is simply a quote prepared by the exporter to resemble a commercial invoice. An international sale often begins with a letter of inquiry from a potential buyer expressing interest in one or more of your products, outlining the terms of their interest and asking for an informal or formal quote.
A proforma invoice is a preliminary bill or estimated invoice which is used to request payment from the committed buyer for goods or services before they are supplied. A proforma invoice includes a description of the goods, the total payable amount and other details about the transaction.