In business operations, especially in international trade, clear documentation is essential for smooth business processes.
A Proforma Invoice is an important communication tool between the buyer and the seller, allowing both parties to confirm transaction details before goods are shipped or payments are made.
1. What Is a Proforma Invoice?
A Proforma Invoice is a preliminary bill of sale issued before an actual transaction takes place.
It outlines the products or services, estimated prices, and terms of trade.
This document is not an official request for payment but serves as a quotation or confirmation of terms.
2. Difference Between Proforma Invoice and Commercial Invoice
- Proforma Invoice: Used before a sale is finalized and serves as an estimate or offer.
The information included helps the buyer make a purchasing decision or prepare customs documentation. - Commercial Invoice: Issued after goods or services have been delivered, and is a final, legally binding document.
It serves accounting, taxation, and customs purposes.
In summary:
A Proforma Invoice is used at the quotation stage before the transaction, while a Commercial Invoice is used at the settlement stage after the transaction.
3. When Should You Use a Proforma Invoice?
Use a Proforma Invoice in the following situations:
- When a client needs a quotation or price estimate before signing a final agreement;
- When you need to assist in applying for export or import permits;
- When you want to clarify transaction terms before receiving payment.
Using a Proforma Invoice increases communication transparency and helps prevent misunderstandings later on.
4. Key Elements in a Proforma Invoice Template
A standard Proforma Invoice should include the following key elements:
- Seller and buyer details
- Invoice number and date
- Description of goods or services
- Unit price, quantity, and total cost
- Shipping details and Incoterms
- Payment terms and expected delivery date
- A clear note stating:
“This is a Proforma Invoice for quotation only. Not a commercial invoice.”
5. How to Create a Proforma Invoice Using Templates
Follow these steps:
- Download an editable template — available in Word, Excel, or PDF format.
- Enter company and buyer details.
- List products, prices, and sales terms.
- Save or send — export it as a PDF and send it to the buyer for confirmation.
Using templates saves time and ensures a professional format while allowing customization to match your company’s style.
Free Download: Printable Artist Contract Template
Click “Use Template” on this page and download a Proforma Invoice Template free—especially one that is printable, editable, and free to use—companies can save time, ensure accuracy, and present a more professional image in their transactions.
6. FAQs about Proforma Invoice Format
6.1 Is a Proforma Invoice legally binding?
No. It serves only as an estimate or quotation.
6.2 Who issues a Proforma Invoice?
Usually, the seller or supplier prepares it before the actual sale.
6.3 Can a Proforma Invoice be used for payment?
No. Payment should be based on the final Commercial Invoice.
7. Conclusion
A Proforma Invoice is an important preliminary document in both domestic and international trade.
It helps establish clear communication between buyer and seller before a sale is finalized, confirming the details of pricing, quantity, terms, and conditions.
Although it is not legally binding and cannot be used for payment, a well-prepared Proforma Invoice builds trust, improves transparency, and reduces misunderstandings during the business process.
