Proforma invoice - What is a proforma invoice?

Definition: A proforma invoice is a document that is sent to a buyer in certain circumstances - usually before all of the invoice details are known.

A proforma invoice is not a true invoice – it is simply a document that declares the seller’s commitment to provide the goods or services specified to the buyer at certain prices.

Proforma invoices are not recorded as an accounts receivable by the seller nor are they recorded as an accounts payable by the buyer.

When proforma invoices are used

If you need to issue a sales document for goods or services you haven't supplied yet, you can issue a proforma invoice to offer goods or services to customers.

Proforma invoices are also often used to declare the value of goods for customs.

Sending proforma invoices

According to the HMRC, proforma invoices are not VAT invoices, and therefore should be marked with the words 'This is not a VAT invoice'.

If the recepient accepts the goods or services offered in the proforma invoice and you in turn supply them, then you must issue a proper VAT invoice within the appropriate time limit.

Proforma invoices in E-conomic

You cannot technically create a proforma invoice in E-conomic, but if you are not using one of the available documents - i.e. order confirmation or quotation - you can replace it with a proforma invoice template.

Learn how to create a proforma invoice in E-conomic in our E-copedia.