What is a pro forma invoice? How and when to use one

Published Wednesday 1 April 2026

Table of contents

• What is a pro forma invoice?
• Three common reasons for issuing a pro forma invoice
• What should a pro forma invoice look like?
• How is a pro forma invoice different from other invoices (and quotes)?
• When to send a pro forma invoice
• How to create a pro forma invoice
• FAQs on pro forma invoices

Key takeaways

• Use pro forma invoices when customers need preliminary cost information for financing arrangements, customs clearance, or internal procurement processes, but always wait for their specific request before creating one.
• Label your document clearly as "pro forma invoice" and include all standard invoice details except an official invoice number and due date, since this document doesn't create payment obligations or accounting entries.
• Keep pro forma invoices separate from your accounts receivable records because they represent pending sales rather than completed transactions, and only issue the final sales invoice after confirming the customer wants to proceed.
• Include essential international trade details like weights, shipping costs, and terms of sale when creating pro forma invoices for imported goods, as customs authorities often require this information for clearance processes.

What is a pro forma invoice?

A pro forma invoice is a preliminary document sent to a buyer before a sale is final. The U.S. International Trade Administration describes it as a quote in an invoice format that may be required to apply for an import licence, open a letter of credit, or arrange financing. It outlines the products, services, and prices involved in a transaction but isn't a request for payment.

Unlike a standard invoice, a pro forma invoice:

• has no invoice number
• has no due date
• isn't recorded in your accounts receivable

Think of it as a detailed preview of what the final invoice will look like once the sale is confirmed.

Three common reasons for issuing a pro forma invoice

Businesses typically issue pro forma invoices in three situations:

• Arranging buyer financing: Buyers use pro forma invoices to confirm order costs and secure financing before committing to a purchase.
• Clearing customs for imports: Customs authorities in many countries require detailed cost information to clear goods. For instance, U.S. Customs regulations state that for instalment shipments, a pro forma invoice must be filed with each entry until the required commercial invoice is produced.
• Meeting procurement requirements: Some customers request pro forma invoices as part of their internal purchasing process because they're more definite than a quote.

What should a pro forma invoice look like?

A pro forma invoice looks similar to a regular invoice but must be clearly labelled "pro forma invoice" at the top. The International Trade Administration recommends including key details such as terms of sale or Incoterm, payment terms, and a validity date, in addition to the following information:

• Buyer and seller details: Names, addresses, and contact information for both parties
• Product or service descriptions: Itemised list of what's being sold
• Prices and quantities: Unit costs and totals for each line item
• Terms of sale: Payment terms, delivery conditions, and any applicable warranties
• Reference number: A tracking number for easy retrieval (this isn't an official invoice number)
• Weights, measures, and shipping costs: Required for international shipments and customs clearance

How is a pro forma invoice different from other invoices (and quotes)?

Pro forma invoices are often confused with other business documents. Here's how they differ.

• Sales invoice: A sales invoice is a formal request for payment sent after a transaction is complete. It includes a due date and creates an accounts receivable entry. A pro forma invoice is sent before the sale is final and doesn't request payment.
• Commercial invoice: A commercial invoice is used in international trade to declare the value of goods for customs. It includes tariff codes, buyer and seller responsibilities, and confirms the sale is complete. A pro forma invoice helps estimate customs duties before shipment but doesn't finalise the transaction.
• Quote: A quote is a price estimate used during negotiations before an agreement is reached. A pro forma invoice typically comes after the deal is agreed and supports administrative processes like financing or procurement.
• Tax invoice: A tax invoice is a legal document for GST-registered businesses that shows the tax amount on a sale. Because a pro forma invoice is issued before any sale occurs, no tax is due. You can show the expected GST, but there's no tax liability until the final sales invoice is issued.

When to send a pro forma invoice

Send a pro forma invoice when a customer specifically requests one. This typically happens after a quote has been accepted and both parties are committed to the deal.

Customers request pro forma invoices to:

• calculate import duties and customs fees
• satisfy internal procurement requirements
• arrange financing for the purchase

If your customer imports goods internationally, ask whether they need a pro forma invoice before you finalise the sale.

The sale is still pending at this stage. Get confirmation from your customer before processing the order, shipping products, or issuing the final sales invoice.

How to create a pro forma invoice

Creating a pro forma invoice takes just a few steps. Follow this process to produce a professional document that stays separate from your accounting records.

1. Start with a standard invoice template from your accounting software or a blank document.
2. Label the document "pro forma invoice" clearly at the top so your customer recognises it as preliminary.
3. Add your business details, including name, address, and contact information.
4. Include your customer's details, including name, company, and address.
5. List the products or services with descriptions, quantities, and prices.
6. Add a reference number for tracking purposes (not an official invoice number).
7. Include payment terms, delivery conditions, and any applicable GST.
8. For international shipments, add weights, dimensions, and estimated shipping costs.

Keep the pro forma invoice out of your accounts receivable ledger. The sale is still pending, so payment obligations begin only after the final invoice is issued. If you're using accounting software, check how to create documents that stay separate from your sales entries. Recording a pro forma as a sales invoice overstates income if your business uses accrual accounting.

FAQs on pro forma invoices

Here are answers to common questions about pro forma invoices.

Is a pro forma invoice legally binding?

A pro forma invoice is a non-binding document. It's a good-faith estimate created before you deliver products or services.

Can a pro forma invoice be cancelled?

Yes, you can cancel or discard a pro forma invoice at any time. Since it stays outside your accounts, you can simply discard it if the sale falls through.

Can you turn pro forma invoices into commercial invoices?

A pro forma invoice and commercial invoice are separate documents that require individual creation. While they share similar information, a commercial invoice includes additional legal and regulatory details required for international trade, such as tariff classifications and terms agreed between buyers, sellers, and customs authorities.

Is it OK to pay a pro forma invoice?

Wait for an official sales invoice before making payment. Prices and terms may still change before the sale is finalised.

What are the advantages of pro forma invoices?

Pro forma invoices offer several benefits for your business:

• Clarity for both parties: Confirms products, prices, and terms before the sale is final, reducing misunderstandings.
• Customs documentation: Provides the detailed information customs authorities need to clear imported goods.
• Flexibility to make changes: Lets you adjust products, services, or costs while keeping your accounting records intact.
• Access to more customers: Opens doors to buyers, particularly importers, who require pro forma invoices as part of their purchasing process.