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A proforma invoice is issued when a seller has discussed the preliminaries of a sale with the buyer but cannot proceed to send an official invoice since the final details of the deal aren't confirmed by the buyer yet. A proforma invoice can be issued to let the buyer know what exactly to expect from the seller.

A final sales invoice (also called a commercial invoice, final invoice, or official invoice) is a business instrument that states the total amount due and requests payment. A proforma invoice is a declaration by the seller to provide products or services in the future and isn't a legally binding agreement.

The main advantage of a proforma invoice is that, as it's not a finalised sales invoice, you don't need to revise it if there are changes to the goods or services you deliver (unlike a regular invoice). This can save you from needless admin.

A customs invoice is a document that allows importers and exporters to send goods internationally. Goods carried across borders must go through customs in the country where the goods are being delivered to see if any tax or duties apply to them.

Is a proforma invoice legally binding? Although a proforma includes much, if not all, of the same information that appears on a final sales invoice, it doesn't carry the same legal weight and shouldn't be used for accounting purposes, or as a binding agreement.

[13MB] A pro forma invoice 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 hard currency.

A pro forma invoice isn't needed for international shipments but is often used when a transaction that isn't final requires an estimate of the cost of products being bought. It should include enough information to allow customs to determine the duties needed from a general examination of the included goods.

If you import goods as part of your business, you can use a pro forma to estimate their value for customs clearance, but you'll still need to supply a commercial invoice within 180 days.

Like a regular invoice, proforma invoices should include contact details, a date of issue, a description of the goods or services provided, the total amount due, and any VAT. They might also include payment terms such as which methods of payment you accept and when payment is expected.

Tax Invoice V/s Pro Forma Invoice Tax invoice is used to notify the buyer that the payment is due. Pro Forma invoice is a document that a supplier provides to a prospective buyer in return of an enquiry made by such a buyer.