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The pro-forma invoice is issued before sales takes place. Once after receiving pro-forma invoice from the supplier, the buyer sends a purchase order or opens a letter of credit to the supplier.

A Proforma Invoice is an important document that is created by the seller of goods.The Proforma invoice will include the seller's bank details so that the buyer can arrange payments as required.

When is Pro forma invoice used? A pro forma invoice is made before the sale happens. For example, a supplier will issue a pro forma invoice if a customer requests him to produce a document for goods or services yet to be delivered. Hence, it is usually issued before the issue of tax/commercial invoice.

Note: only after a pro forma invoice is converted into a true invoice will its value be registered in your account. This is because, until that point, there is no guarantee the customer will agree to your terms.

As a proforma invoice is not a legally binding document, or the official invoice used for accounting, they do not need to be cancelled. Similarly to a quotation document, if the sale does not go ahead, no action is required to edit or cancel the proforma invoice.

A proforma invoice includes a description of the goods, the total payable amount and other details about the transaction. It is essentially a "good faith" agreement between you (the seller) and a customer so the buyer knows what to expect ahead of time.

Proforma Invoice is a preliminary sales invoice that contains an estimated price and commission.It also includes estimated costs of shipment, taxes, and commissions (as applicable).