Proforma Invoice: What It Is + When to Use One
A proforma invoice looks like a real invoice — but it's not a demand for payment. It's a preview of what the invoice will look like. Confusing? It doesn't have to be. This guide explains exactly what a proforma invoice is, when to use one, and how it differs from a regular invoice, quote, and estimate.
What is a proforma invoice?
A proforma invoice(sometimes written "pro forma invoice") is a preliminary document that looks like an invoice but does not create a legal obligation to pay.
Think of it as an invoice draft sent beforethe actual invoice. It communicates: "here is what we are planning to charge you." It uses the same format as a real invoice — your company letterhead, line items, prices, VAT — but is clearly marked "PROFORMA INVOICE" instead of "INVOICE".
In plain English:
A regular invoice says: "You owe me €2,400. Pay by 15 June." A proforma invoice says: "When we finalise this, I plan to charge you €2,400. Not a request for payment yet."
When to use a proforma invoice
International shipping / import-export
Most common use caseCustoms authorities require a declared goods value before a shipment arrives. A proforma invoice provides that declaration before the commercial invoice exists. It shows the goods, quantities, values, and country of origin for customs clearance.
Advance payment / deposit request
Common for large projectsIf you want to request a 50% deposit before starting work, you can issue a proforma invoice for that amount. Some clients prefer this over a quote because it shows exactly what their payment will look like.
Budget approval by a client's finance team
Corporate / enterprise clientsLarge companies require purchase order approval before committing to a spend. A proforma invoice gives their finance team a formal document to approve before you issue the real invoice.
Recurring subscriptions — first invoice preview
Retainer clientsBefore a client signs up for a monthly subscription or retainer, show them a proforma of what their monthly invoice will look like. Builds trust and reduces billing surprises.
Proforma invoice vs regular invoice
| Feature | Proforma Invoice | Commercial Invoice |
|---|---|---|
| Header | PROFORMA INVOICE | INVOICE |
| Legal obligation to pay | None | Yes — legally binding |
| Invoice number | PI-001 (separate sequence) | INV-001 (sequential) |
| Payment due date | Usually none | Required |
| VAT / tax | Estimated (informational) | Formally charged |
| Recorded in accounts | No — not a financial event | Yes — accounts receivable |
| Used for customs? | Yes — declares goods value | Yes — after shipment |
| Triggers payment reminder? | No | Yes — Chaser automates this |
Proforma invoice vs quote vs estimate
Three documents, all meaning roughly "here's what this will cost" — but with important differences:
Proforma Invoice
Quote
Estimate
What to include in a proforma invoice
A proforma invoice contains the same fields as a regular invoice, with two key changes:
- ✓Header: Must say 'PROFORMA INVOICE' — not 'Invoice'
- ✓Invoice number: Use a separate sequence: PI-001, PI-002, etc.
- ✓Your business details: Same as on your regular invoices
- ✓Client details: Name, address, company
- ✓Date: Date issued
- ✓Description of goods/services: Detailed line items
- ✓Quantities and unit prices: Same format as regular invoice
- ✓VAT / tax (estimated): Mark as 'estimated' if final rate may change
- ✓Total amount: Clear total — what the actual invoice will charge
- ✓Payment terms (indicative): e.g. 'Invoice will be payable within 14 days of issue'
- ✓No payment due date: This is not yet a payment demand
Free proforma invoice template
Use Chaser's free invoice builder to create a proforma invoice in minutes. Fill in all your details, then change the header to "PROFORMA INVOICE" in the notes field. Download as a professional PDF.
When your work is complete and you're ready to bill, simply reissue as a regular invoice with a proper invoice number and due date.
Create Free Proforma Invoice →Free. No signup. Instant PDF download.
Frequently Asked Questions
What is a proforma invoice?
A proforma invoice is a preliminary billing document sent before the actual work is delivered or the final price is confirmed. It looks exactly like a regular invoice — with all the same fields — but it is clearly labelled 'PROFORMA INVOICE' and does not create a legal obligation to pay. It is a declaration of intent or estimate of what will be billed.
Is a proforma invoice a legal document?
No. A proforma invoice is not a legally binding payment demand. It does not create a legal obligation to pay. A regular (commercial) invoice is the legally binding document. However, in international trade, proforma invoices do have an official use: customs authorities require them to declare the value of goods being shipped before the commercial invoice exists.
What is the difference between a proforma invoice and a quote?
A proforma invoice looks like an invoice — it uses the same format, the same fields, and is often on your company letterhead. A quote (or proposal) looks like a proposal — it typically includes scope of work, terms, and a pricing breakdown. Functionally, both communicate 'here's what this will cost.' The difference is presentation: a proforma invoice signals 'this is what your invoice will look like'; a quote signals 'here is my proposal for the work.'
When should I use a proforma invoice?
Use a proforma invoice in these situations: (1) International shipping — customs requires a declared goods value before the shipment. (2) Advance payment requests — you want to request a deposit before work begins, using an invoice-format document. (3) Large new clients who need budget approval — their finance team needs a proforma to get the purchase approved before they can commit. (4) Subscriptions or recurring charges — show the client what their monthly invoice will look like before they sign up.
Does a proforma invoice need an invoice number?
Proforma invoices typically use a different numbering prefix to distinguish them from your regular invoice sequence. Common formats: PI-001, PRO-001, or PRF-001. Do not use your regular invoice number sequence — you don't want your sequential invoice numbers to have gaps where proformas were created.
Can I convert a proforma invoice to a real invoice?
Yes, and this is common practice. Once the work is complete (or the goods shipped), you reissue the document as a proper commercial invoice — with a real invoice number, payment due date, and the 'PROFORMA INVOICE' header changed to 'INVOICE'. The content is usually identical; only the status of the document changes.
Is VAT charged on a proforma invoice?
VAT should not be 'charged' on a proforma invoice because it is not a binding payment document. However, you should show the estimated VAT amount for transparency. Once you issue the actual commercial invoice, that is when VAT is formally charged and becomes a liability. For customs purposes, proforma invoices typically show the full value including estimated duties.
Once the proforma becomes an invoice — get paid
Chaser automates follow-up on your real invoices — 4 escalating emails until the client pays. Start free, no credit card required.
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