what is a proforma invoice

A proforma invoice is a preliminary bill of sale sent to a buyer before work is completed or goods are delivered. It is a quote in an invoice format that may be required by the buyer to apply for an import license, contract for pre-shipment inspection, open a letter of credit, or arrange for transfer of foreign currency. A proforma invoice is not an official invoice, but rather a commitment to goods or services that havent yet been delivered. It is used by a seller to communicate to a buyer the expected costs, fees, and date of delivery for an order. A proforma invoice should include the work to be completed or goods to be provided, along with the quantity of each and the price to be charged for them. It should give the buyer as much information about the order as possible so arrangements can be made efficiently. The invoices inform the buyer and the appropriate import government authorities details of the future shipment; changes should not be made without the buyer’s consent. A proforma invoice is usually sent to a customer or client when they’ve committed to purchasing from you, but can’t be sent an official invoice because the final details still need to be confirmed. Once the customer agrees to everything, then the seller delivers the goods and issues a final, official invoice to request payment.