What is the difference between a proforma invoice and a normal invoice?

A proforma is a quote in invoice form, sent before goods or services are delivered. A commercial or tax invoice is the real demand for payment, issued once the sale is confirmed. A proforma does not go in your sales ledger and cannot be used to reclaim VAT.

Is a proforma invoice legally binding?

It is not a contract on its own and does not create a debt. It is a good-faith statement of price and terms. The binding document is the agreement or purchase order the parties sign, followed by the final invoice.

Can a client pay against a proforma invoice?

Yes, and that is a common reason to send one — to collect a deposit or full prepayment before starting. Once the money arrives, issue a final invoice showing the payment received so your accounts and the client's match.

Does a proforma invoice need an invoice number?

It should carry its own reference, but keep proforma references in a separate series from your real invoices so your sequential invoice numbering stays unbroken. A prefix such as PRO- makes the distinction obvious.

Why do customs authorities ask for a proforma invoice?

For shipments where the final commercial invoice is not ready, customs use a proforma to estimate duties and taxes. It needs a description of the goods, quantities, values, country of origin, and the agreed delivery terms.

Proforma Invoice Template — Free Generator

Item	Qty	Rate	Amount
Website design and build — advance (50% of project fee)	1	$2,500.00	$2,500.00

A proforma invoice is a preview. It tells a customer what an order will cost and on what terms, before anyone is committed to the final figures. It looks like an invoice, but it does not behave like one: it creates no accounting entry, settles no debt, and cannot be used to reclaim tax. Used well, it removes surprises; used carelessly, it confuses your books.

When a proforma is the right document

Reach for a proforma when a real invoice would be premature but the customer needs numbers on paper. Typical cases:

Collecting a deposit or prepayment. You want money before you start, but the job is not delivered, so a tax invoice would be wrong. A proforma states the advance and how to pay it.
Confirming a quote the client asked to formalise. Some procurement departments cannot raise a purchase order from an email; they need an invoice-shaped document to work from.
Customs clearance without a final invoice. For international shipments where the commercial invoice is still being prepared, customs will accept a proforma to assess duties.
Grant or budget approval. A client needs to show a funder the expected cost before authorising the spend.

What a proforma invoice must contain

Most of the fields match a normal invoice, with a few deliberate differences.

The words "Proforma invoice" prominently at the top, so no one mistakes it for a payable invoice.
Your business name, address, and contact details.
The customer's name and address.
A proforma reference from its own numbering series — not your live invoice sequence.
The date of issue and a validity period, such as "prices valid for 30 days".
A line-by-line description of the goods or services, quantities, unit prices, and the total.
The currency, stated explicitly.
Expected delivery or completion terms.
A note that it is not a tax invoice and that a final invoice will follow.
Bank or payment details if you are inviting an advance payment.

For goods crossing a border, add the country of origin, the shipping or Incoterms basis, gross and net weight, and any HS tariff codes you have. Customs officers need those to estimate charges.

Keep proforma numbering separate

The one bookkeeping trap with proformas is numbering. Your real invoices should run in an unbroken sequence, because gaps look like missing records to an auditor. If a proforma takes a number from that sequence and the deal falls through, you are left explaining a hole. Give proformas their own prefix and counter — PRO-2026-001, PRO-2026-002 — and only allocate a real invoice number when you issue the final invoice.

Turning a proforma into a final invoice

Once the customer accepts and, where relevant, pays the advance:

Issue a final (commercial or tax) invoice with a number from your live series.
Copy the accepted lines across, adjusting quantities or prices if the order changed.
If a deposit was paid against the proforma, show it as a negative line — "Less advance paid (PRO-2026-001)" — so the balance due is correct.
Apply the correct tax treatment on this document; the proforma's "not a tax invoice" note no longer applies.

Tax rules for advances and proformas differ by country — in some, receiving a prepayment creates a tax point even before delivery. Check how that works where you are registered rather than assuming the proforma keeps the tax clock stopped. This is general information about how proformas work, not tax or legal advice for your business.

Before you send

Fill in the fields above, make sure the heading reads "Proforma invoice", set a validity period, and download the PDF. When the job is confirmed, a free NeatDue account will number the final invoice for you and keep it in a clean sequence.

Proforma invoice template