Proforma Invoice

A preliminary bill of sale sent before delivery that quotes price and terms but is not a demand for payment.

A proforma invoice is a quotation in invoice format, sent to a buyer before goods or services are supplied. It states the expected items, quantities, prices, taxes and terms so the buyer can confirm or arrange financing.

Unlike a tax invoice, a proforma invoice is not recorded in the books as a sale, does not create a payment obligation, and cannot be used to claim input tax credit. A tax invoice is issued once the deal is confirmed.

• Sent before the sale; used for quotes and approvals.
• Not an accounting document; no ITC and no payment due.
• Converted to a tax invoice when the order is confirmed.