Proforma Invoice Format
A priced commitment before the tax invoice — what buyers send to their bank or their board.
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| To | [customer] |
| Reference | [reference] |
| Date | October 14, 2026 |
| Valid for | [validity] |
| Description | Qty | Rate | Amount |
|---|---|---|---|
| [add one line per item] |
Terms
—Delivery: [delivery terms]
—Payment: [payment terms]
This is a proforma invoice issued for the buyer’s internal approval, import licensing or advance payment. It is not a demand for payment and no tax is payable against it. A tax invoice will follow on despatch.
What is a Proforma Invoice?
A proforma invoice is a priced commitment issued before the real thing: it tells a buyer exactly what you will supply, at what price, on what terms, so they can raise a payment, open a letter of credit or get a purchase approved. It is not a demand for tax and it does not go in your sales ledger. Issue one as a tax invoice and you have declared output tax on a sale that has not happened.
Exporters use proformas constantly — an overseas buyer takes one to their bank to open a letter of credit or arrange a remittance, and customs authorities in the destination country may accept it as the supporting document for a shipment where a commercial invoice is not yet available. Domestically they are used for advance payment: new accounts without credit terms, bespoke manufacturing that needs a deposit, and any situation where a buyer's finance team needs a document with a number on it before releasing funds. Buyers also use them internally to get board or budget approval for a purchase.
Tax treatment is where this document catches people out. In the UK and the EU, a proforma is not a VAT invoice and must not be treated as one by either side; the guidance is generally to mark it clearly as such. Indian GST rules distinguish a proforma from a tax invoice and from a receipt voucher issued against an advance. In the US, sales tax obligations vary by state and a proforma is generally not a taxable document. For international shipments, what customs will accept differs by destination country. Check the current rules of your own tax authority and the destination.
A proforma creates no accounting entry and no debt. It is not a receipt, so it does not prove payment; it is not a tax invoice, so the buyer cannot reclaim input tax against it; and it is not a contract on its own, though it can form part of one if the buyer accepts it. Once payment arrives or the goods ship, you must issue a proper tax invoice with the content your jurisdiction requires. Sending a proforma and never following it with a tax invoice leaves both sides with defective records.
What to put in a Proforma Invoice
These are the details this template asks for. Anything left blank is marked in red on the preview so you can see what is still missing.
| Field | What goes in it |
|---|---|
| Business name | For example: Barton Supply Co. |
| Your address | For example: Unit 7, Barton Road, Columbus, OH 43212 |
| Customer name | For example: Halliwell Interiors Inc. |
| Customer address | For example: 44 High Street, Columbus, OH 43215 |
| Quotation valid for | For example: 30 days from the date above |
| Delivery terms | For example: Ex works, Columbus. Despatch within 10 working days of advance. |
| Payment terms | For example: 40% advance with order, balance against despatch documents |
| Tax rate % optional | For example: 20 |
| Items ordered | One per line: Description | Qty | Unit price |
How to write a Proforma Invoice
Label it Proforma Invoice at the top
Use the words in the largest heading on the page and repeat them in the filename and the email subject. Add a line stating this is not a tax invoice and no tax is being reclaimed against it. Buyers' accounts payable systems and customs brokers both scan for the heading, and a document headed simply ‘Invoice’ will be booked as a payable and reclaimed against.
Use its own reference and a validity date
Number it in a separate series from your tax invoices — PI-2026-0342 — so the two can never be confused in your ledger or theirs. State an expiry: ‘valid for 30 days from the date shown’. Prices, freight rates and exchange rates move, and an open-ended proforma is a quote you have accidentally left standing all year.
Describe the goods to customs standard
For anything crossing a border, list each item with a full description, quantity, unit price, HS or tariff code, country of origin, net and gross weight and package count. A broker cannot clear a shipment against ‘spare parts, 1 pallet’. Add the incoterm and named place — for example CIF Rotterdam — so responsibility for freight, insurance and duty is unambiguous.
State payment terms and bank details precisely
Give the amount, the currency in full, the payment method, and complete bank details including account name, account number, IBAN or routing number and SWIFT or BIC. Say who bears bank charges. If a deposit structure applies, break it out: percentage on order, balance before despatch. Confirm bank details by a second channel — proforma invoices are a favourite target for payment redirection fraud.
Set out what happens after payment
Say when the tax invoice will follow, the lead time from cleared funds to despatch, and the expected shipping method. If the buyer needs a certificate of origin, packing list, inspection certificate or insurance document, list what you will provide. Sign it, or add a named contact with a direct phone number, so the buyer's bank has someone to verify against.
Common mistakes
- Heading the document ‘Invoice’ rather than ‘Proforma Invoice’, so the buyer books it as a payable and reclaims tax against a supply that has not happened.
- Numbering proformas in the same sequence as tax invoices, which leaves gaps in your invoice series and a reconciliation your accountant will not enjoy.
- Leaving off the incoterm and named place, so nobody knows who pays freight, insurance and import duty until the shipment is stuck at a port.
- Omitting a validity date, so a buyer accepts a six-month-old price after your material costs and freight rates have moved.
- Never issuing the tax invoice once payment clears, leaving the buyer unable to reclaim input tax and your own records without a recorded sale.
Frequently asked questions
What is the difference between a proforma invoice and a tax invoice?
A proforma is issued before the supply and is a priced commitment: no tax point, no ledger entry, no input tax reclaim. A tax invoice is issued when the supply or payment occurs, carries the content your tax authority prescribes, and is the document both sides account for. Issue the proforma to get the order and the payment moving, then the tax invoice to record the transaction properly.
Can a customer pay against a proforma invoice?
Yes — that is one of its main uses. Advance payment against a proforma is standard for new accounts, export orders and bespoke work. Once the money arrives you should issue the appropriate document under your local tax rules, which may be a tax invoice, or in some systems a receipt voucher against the advance followed by an invoice on supply. Confirm which applies with your tax authority or accountant.
Is a proforma invoice legally binding?
On its own it is generally an offer rather than a contract, though it can become binding if the buyer accepts it and both sides act on it. Treat it as a firm quotation with the commercial detail filled in: include a validity period, state your conditions of sale, and say that acceptance is by payment or by returning a signed copy. Whether a contract has formed depends on the contract law where you trade.
Do I charge VAT or GST on a proforma invoice?
You show the tax that will apply so the buyer knows the full amount, but the proforma is not the document on which tax is accounted for and the buyer cannot reclaim against it. Rules on advance payments differ — some systems create a tax point when an advance is received. Check your tax authority's guidance on proforma documents and advance payments before deciding how to present the figures.
Will customs accept a proforma invoice?
Sometimes, and it varies by destination country and by the type of movement — samples, temporary imports and shipments awaiting a commercial invoice are the usual cases. Where it is accepted, it must carry full descriptions, tariff codes, origin, weights, values and the incoterm. Check the import requirements of the destination customs authority or ask the freight forwarder before assuming a proforma will clear the goods.
This page explains general practice and is not legal advice. Requirements differ between countries and, in some cases, between states — check what applies where the document will be used.