What a proforma actually is
A proforma invoice is a preview of a sale: it shows the goods or services, prices and expected total before the supply happens. Think of it as a formal quote dressed as an invoice. It creates no VAT obligation, doesn’t enter your invoice sequence, and no one can reclaim VAT against it.
Proforma vs quote vs invoice
| Document | When | Binding? | VAT document? |
|---|---|---|---|
| Quote | Early — client is comparing options | No | No |
| Proforma | Deal agreed — payment or approval needed before supply | No | No |
| Invoice | Supply made (or payment received) | Yes — it’s a demand for payment | Yes |
When a proforma is the right tool
- Upfront payment from new clients. You want money before starting, but a real invoice before any supply muddies your VAT timing. Proforma first, real invoice on payment.
- The client’s purchasing process demands it. Many companies raise purchase orders against a proforma before approving payment.
- Customs and shipping. International shipments often travel with a proforma so customs can assess values before the commercial invoice exists.
How to issue one properly
- Label it “PROFORMA INVOICE” loudly — the whole point is that nobody mistakes it for the real thing.
- Use a separate reference (PRO-007), keeping your real invoice sequence unbroken.
- Show the same detail as a real invoice — lines, rates, expected VAT, total — so the final invoice holds no surprises.
- When the deal completes, issue the real invoice from your normal sequence. Build it in the generator in a minute; see how to make an invoice for the required fields.
Frequently asked questions
Is a proforma invoice legally binding?
No. A proforma is a preview of a sale — prices can still change and neither side is committed by it. The binding documents are the contract or purchase order, and the real invoice once issued.
Can my customer pay against a proforma?
They can transfer money against it (common for upfront payment), but you must still issue a real invoice once payment is received or the supply happens — the proforma itself is not a VAT document.
Can VAT be reclaimed on a proforma invoice?
No. Only a valid VAT invoice supports a VAT reclaim. That is exactly why proformas must be clearly labelled — so nobody files one as a purchase invoice by mistake.
Should a proforma have an invoice number?
Give it its own reference (like PRO-007), not a number from your real invoice sequence. Your invoice sequence must stay unbroken, and a proforma is not part of it.