Pro Forma Invoice: Definition, Uses, and When You Need One

Searches for pro forma invoice and proforma invoice both refer to exactly the same document — a preliminary bill of sale issued before goods are shipped or services are fully delivered. The two-word spelling "pro forma" (with a space) is technically the Latin original; "proforma" (one word) has become equally accepted in international trade and business English. This guide uses both spellings interchangeably.

Pro forma invoice definition

A pro forma invoice is a document that presents an estimated or proposed invoice — it states the seller's intent to supply goods or services at agreed prices and terms, before the actual transaction is completed. It is a commitment to price, not a demand for payment.

Unlike a commercial invoice or tax invoice, a pro forma invoice:

• Is issued before goods are shipped or services are delivered
• Is used for buyer approval, not for accounting entry
• Cannot be used for tax purposes in most jurisdictions
• Does not trigger a payment obligation on its own (it is an offer, not a demand)

Why is it called "pro forma"?

The term comes from the Latin phrase pro forma, meaning "for the sake of form" or "as a matter of form." In other words, the document follows the form (layout and fields) of a real invoice, but its substance is that of a quotation or offer — it is formally complete, but not yet legally binding as a payment demand.

Pro forma invoice vs commercial invoice vs tax invoice

When do you need a pro forma invoice?

The most common scenarios where a pro forma invoice is required or expected:

International export

Buyers importing goods from overseas often need a pro forma invoice before goods are shipped to:

• Apply for an import permit or license (Nigeria Form M, Indonesia API, Saudi Saber)
• Estimate import duties and taxes
• Apply for foreign exchange allocation
• Pre-clear customs before the actual shipment arrives

Letter of Credit (LC) payments

When a buyer pays via LC, their bank needs a pro forma invoice to issue the LC. Every detail on the pro forma — product description, HS codes, value, Incoterms, ports — must exactly match all subsequent shipping documents. This is why accuracy on the pro forma is critical in LC transactions.

Advance payment / deposit

Manufacturers, service providers, and wholesalers issue a pro forma invoice to request an advance payment before starting production or delivering services. The pro forma documents the agreed scope and amount.

Budget approval

Many corporate buyers need to route a purchase through internal finance approval. A pro forma invoice gives the finance team a formal document to approve before the purchase order is raised.

Customs pre-entry

Some countries allow importers to pre-lodge customs entries based on a pro forma invoice, reducing clearance time after the goods arrive.

What should a pro forma invoice include?

A complete pro forma invoice should contain:

• Document title: "PROFORMA INVOICE" or "PRO FORMA INVOICE"
• Unique pro forma number (separate from tax invoices)
• Issue date and validity date
• Seller details: name, address, tax ID
• Buyer details: name, address, reference/PO number
• Line items: description, HS code (for export), quantity, unit price, line total
• Subtotal, freight, insurance, tax (if applicable), grand total
• Currency (state explicitly — USD, EUR, GBP, etc.)
• Payment terms: advance %, method (T/T, LC), balance timing
• Incoterms + named place (for export): e.g. FOB Singapore
• Delivery timeline (e.g. "30 days from advance receipt")
• Signature of authorized person
• Disclaimer: "Not a tax invoice — for quotation purposes only"

Pro forma invoice example

See our fully completed proforma invoice example — a filled-in sample with HS codes, Incoterms, payment split, and bank SWIFT details. It shows exactly what each field should look like in a real export transaction.

Free pro forma invoice template

Download a free pro forma invoice template from our template gallery — available in Word-compatible HTML, Excel/CSV, and PDF. Or use the free online generator to create a branded pro forma invoice PDF in under two minutes, with no sign-up required.

Pro forma invoice in different languages

The term translates differently across languages — here are common equivalents used in international trade documents:

• German: Proformarechnung
• French: Facture proforma
• Spanish / Portuguese: Factura proforma
• Italian: Fattura proforma
• Arabic: فاتورة أولية (Fattura Awliya)
• Chinese: 形式发票 (Xíngshì fāpiào)
• Polish: Faktura pro forma
• Turkish: Proforma fatura

Frequently asked questions

Is "pro forma" or "proforma" the correct spelling?

Both are correct in business English. "Pro forma" (two words) is the original Latin form and is used in formal financial contexts. "Proforma" (one word) is widely used in trade documentation and is equally accepted in international business correspondence.

Can a pro forma invoice be used as a receipt?

No. A pro forma invoice is a quotation document, not a receipt. After payment is received, issue a receipt or official tax invoice as appropriate in your jurisdiction.

How long is a pro forma invoice valid?

Typically 14–90 days, depending on industry and commodity price volatility. Always state an explicit "Valid Until" date so the buyer knows when prices may change.

Does a pro forma invoice need to be signed?

Not always mandatory, but a signature or stamp is expected by most banks, customs authorities, and buyers in formal export transactions. For LC transactions, a signed pro forma is standard practice.