A proforma invoice (also spelled pro forma invoice) is a document a seller sends before a sale is final. It states the product, price, quantity and terms the two sides are discussing. It looks like an invoice, but it is a quote in invoice format: not a bill, and not proof that a sale has happened.
Buyers who skip it and rely on email alone often find a mismatch in specification or price only after production has started. A signed proforma gives both sides one document to point back to. This guide explains what it contains, shows an example, and gives you a checklist for approving one.
What does “proforma” mean?
“Pro forma” is Latin for “as a matter of form”. In trade, it means the invoice is issued to describe a proposed deal, rather than to request payment for a completed one. “Proforma” and “pro forma” are both used and mean the same thing.
What is a proforma invoice used for?
The US International Trade Administration describes the proforma invoice as a quote that helps a buyer do several practical things. In international trade it is commonly used to:
- agree the deal in writing before production or shipping starts
- apply for an import licence
- support a pre-shipment inspection contract
- open a Letter of Credit
- arrange a currency transfer
The same guide notes that a proforma “may not” be a required shipping document, but that it gives the buyer the information needed to import the goods legally. Source: trade.gov, Pro Forma Invoice.
Couriers also commonly ask for a proforma when you send samples that are not being sold. Rules differ by courier and country, so check with yours before you ship.
What does a proforma invoice include?
According to the same trade.gov guide, a proforma invoice should contain:
- seller and buyer names and addresses
- the buyer’s reference number
- item descriptions
- unit prices and extended (total) prices
- weights and dimensions
- any discounts
- terms of sale: the Incoterm and the delivery point
- payment terms
- the estimated shipping date
- a validity date
Three extra details are worth asking for: the HS code of the product, the country of origin, and the seller’s bank details exactly as they will appear on the final invoice. The HS code is the international product classification that customs uses; the World Customs Organization explains how it works.
Proforma invoice example
The table below is an illustration with placeholders, so you can see the layout. Replace every bracketed value with your own.
| Field | Example entry |
|---|---|
| Document | Proforma Invoice No. [PI-0001], dated [date] |
| Seller | [Company name, address, contact] |
| Buyer | [Company name, address, buyer reference] |
| Item and specification | [Product, grade or size, packaging, matching your written spec] |
| HS code / country of origin | [HS code] / [Country] |
| Quantity | [Number and unit] |
| Unit price / total | [Price per unit] / [Total value, currency] |
| Incoterm | [FOB or CIF] [named port] |
| Payment terms | [Deposit %, balance due, method] |
| Seller bank details | [Account name, bank, account number or IBAN, SWIFT] |
| Estimated shipping date | [Date, or “X days after payment”] |
| Valid until | [Date] |
Here is how the money part usually reads, with made-up numbers for the arithmetic only: 1,000 units at USD 12 each is USD 12,000. If the agreed payment is a 30% deposit with the balance before shipping, the deposit is USD 3,600 and the balance is USD 8,400. The proforma should show those amounts, the currency and the due dates, so nobody has to recalculate from emails.
How a proforma invoice fits into an export order
The exact order of steps varies by deal, but a typical flow looks like this:
- Enquiry: the buyer sends the product, specification, quantity and destination.
- Quotation: the seller replies with a price and terms.
- Proforma invoice: once the details are agreed, the seller issues the proforma with a number, date and validity.
- Review and approval: the buyer checks it against the specification and signs it off.
- Payment set-up: the buyer pays a deposit, or the bank opens a Letter of Credit using the proforma as supporting paperwork.
- Production and shipping: the goods are made and shipped.
- Shipping documents: the seller issues the commercial invoice and packing list, which go to the buyer and to customs.
- Balance and clearance: the balance is paid and the buyer clears the goods at the destination.
Proforma invoice vs commercial invoice
The two do different jobs and should not be swapped. Use the wrong one and customs or your bank may question it, especially when a Letter of Credit is involved.
| Proforma invoice | Commercial invoice | |
|---|---|---|
| When | Before the order is confirmed | After the goods have shipped |
| Purpose | A quote both sides agree on | Legal record of a completed sale |
| Used for | Approving the deal, licence applications, opening an LC | Customs clearance |
| Is it a bill? | No | Yes |
Trade.gov describes the commercial invoice as a required document for export and import clearance, which customs officials in the buyer’s country use to assess duties and taxes. It carries the information from the proforma, plus the HS codes and a destination control statement. Read the details in the trade.gov commercial invoice guide, or in our guide to the commercial invoice and packing list.
Proforma invoice vs quotation vs purchase order
People mix these three up, and each one has a different author and job.
| Quotation | Proforma invoice | Purchase order | |
|---|---|---|---|
| Issued by | Seller | Seller | Buyer |
| Format | Any layout | Invoice layout with number, line items and totals | Buyer’s order form |
| Purpose | Offer a price and terms | Set out the deal in a form banks and licensing offices accept | Confirm the buyer wants to go ahead |
A proforma is a quotation set out as an invoice. That format is why banks, licensing offices and inspection companies accept it as supporting paperwork, where a casual email quote usually would not be.
Can a proforma invoice be used for customs?
Customs normally relies on the commercial invoice. Some customs systems do accept a proforma as a fallback when the final invoice is not ready. In the United States, for example, 19 CFR 141.85 allows a pro forma invoice to be filed when no commercial invoice is available. It must state the shipper, seller, consignee and purchaser, whether the goods were purchased or agreed to be purchased, the basis of the prices, a description of the goods with quantities and unit and total prices, the country of origin, and which charges are included in the price. If the real invoice arrives later, the importer must file it promptly. Source: 19 CFR 141.85 (Cornell Legal Information Institute).
That is a US rule. Other countries have their own, so do not assume a proforma will clear your goods. Ask your customs broker what the destination accepts, and see why customs clearance gets delayed for how paperwork problems cause delays.
Proforma invoices and Letters of Credit
Banks commonly ask for a proforma invoice as supporting paperwork before they open a Letter of Credit. The LC is then built around the agreed terms, and payment is released only against documents that match it. The ICC guidelines on documentary credits explain how that matching works.
This is why the proforma has to be right before the LC is requested. A wrong description, price or date on the proforma tends to be copied into the LC application, and a mismatch between documents is exactly what holds payment later. Next step: read how to open a Letter of Credit, or LC vs TT payments if you are still choosing a payment method.
Why buyers should insist on one
Get a proforma, review it carefully and have your own team sign it off before you confirm the order. If the shipment later differs from what was agreed, you have a specific document to point to. Without one, a dispute comes down to two memories of an email thread, which is a weaker position to negotiate from.
A proforma is usually described as not legally binding on its own. Once both sides sign or accept it, though, it becomes strong evidence of the terms you agreed, so treat approval as a real commitment. For questions about what binds you, ask a lawyer.
Buyer checklist: what to check before you approve
- Specification: does the description match your written spec, not just a category name?
- Quantity and packaging: are the units, packaging and any quantity tolerance written down?
- Incoterm: is it stated with a named port or place, not just “FOB” with no location? The ICC publishes the rules, and we explain them in FOB, CIF and EXW explained.
- Payment structure: do the deposit percentage, balance timing and method match what you agreed?
- HS code and origin: are they stated, and do they match what your customs broker expects?
- Validity period: is it long enough to review without the quote expiring mid-negotiation?
- Party details: are your company name and address correct, and does the seller’s name match the bank account?
- Number, date and version: does it carry a unique number and date, so a later change is clearly a new version?
Red flags before you pay anything
- The bank account is in a different name or country from the seller on the document.
- The bank details in the email differ from those on the proforma.
- The description is vague, with no specification, grade or size.
- There is no validity date, or no payment terms.
- The seller asks you to pay before you have a proforma at all.
- Changes were made after approval without a new number or date.
Before you send a deposit, confirm the bank details by a route you already trust, such as the phone number in your contract, not the one in the email that carries the invoice.
Related guides
If you are preparing an order, these guides cover the next steps: FOB, CIF and EXW explained, the commercial invoice and packing list, and how to open a Letter of Credit.
