A proforma invoice is a preliminary document that serves as a request for payment in advance – typically for the full amount. It is not an accounting or tax document, so it does not appear in your books and does not create a tax obligation. It is most commonly used when you want your customer to pay before you deliver the goods or service. Once payment is received, you issue a proper invoice.
What should a proforma invoice include?
A proforma invoice has no legally prescribed format – precisely because it is not a tax document. However, to ensure the customer knows what to pay, how much and where to send the money, it should include the following details:
#Once you receive payment based on a proforma invoice, issue a proper invoice referencing the proforma number. This creates a clear document trail: proforma (payment request) → final invoice (tax document).
When and why is a proforma invoice used?
A proforma invoice is issued when you want payment from the customer in advance and need to provide them with the payment details:
Advance payment for goods or services – You don't want to deliver until the money is in your account. The proforma tells the customer the exact amount, bank details and payment reference.
International trade – In cross-border transactions, a proforma is the standard document on which the customer pays in advance or arranges customs clearance. It is often required by banks and customs authorities.
New customers or one-off orders – For customers with no payment history, a proforma ensures they pay before you begin fulfilling the order.
Formal quotation with payment details – A proforma also serves as a binding offer that the customer can confirm by making the payment.
Proforma invoice vs. advance invoice: Both documents serve as a request for payment before delivery and neither is a tax document. The difference is that a proforma is typically issued for the full amount – the customer pays everything up front and you then issue a final invoice. An advance invoice requests a partial payment, with a final invoice issued after delivery to settle the remaining balance.
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