Proforma invoice: meaning, example and how it works

A proforma invoice looks like a real invoice but is not one. Learn what a proforma invoice means, when to use one, how it differs from a standard invoice, and how to create one in minutes with Bizzey.

What is a proforma invoice?

A proforma invoice (also written pro forma invoice) is a document that looks like an invoice but does not create a legal obligation to pay. The term "pro forma" comes from Latin and means "as a matter of form."

A proforma invoice is essentially a preliminary invoice or a confirmed quote in invoice format. It contains all the information you would expect on a standard invoice — item descriptions, quantities, prices and VAT — but is clearly marked "PROFORMA" or "PRO FORMA" and does not carry an official invoice number.

Proforma invoices are commonly used for:

• International shipments (for customs and import documentation)
• Projects where the client needs a preliminary cost estimate
• Situations where a client must obtain internal budget approval before committing

Is a proforma invoice legally binding?

No — a proforma invoice is not legally binding. It creates no payment obligation and cannot be used for VAT reporting or accounting purposes.

Specifically:

• The client is not legally required to pay based on a proforma invoice
• You cannot record a proforma invoice as revenue in your accounts
• VAT cannot be reported on a proforma invoice

A legal obligation only arises when a formal invoice is issued. The proforma invoice serves purely as an informational document.

Exception: In some countries, particularly for import and export, the proforma invoice has an official function in customs procedures — but solely to declare the value of goods, not as proof of a taxable transaction.

Proforma invoice vs. invoice vs. quote

Many business owners are unclear on the differences between a quote, a proforma invoice and a standard invoice. Here is a clear comparison:

Quote vs. proforma invoice: A quote is a formal price proposal to a potential client. A proforma invoice is used after the client has agreed — as confirmation of what will be charged, often for internal approval or customs documentation.

Proforma invoice vs. standard invoice: The only visible difference is the "PROFORMA" label and the absence of a final invoice number. Once goods or services are delivered, you replace the proforma with an official invoice.

When do you use a proforma invoice?

Use a proforma invoice in the following situations:

1. Import and export When shipping internationally, customs authorities require a proforma invoice to determine the value of goods for import duties and tariffs. It is used for customs declarations but is not an official commercial document.

2. Budget approval Many companies request a proforma invoice so their procurement team or finance department can approve a purchase internally before placing a final order.

3. Advance payments and deposits If you request a deposit from a client, you may first issue a proforma invoice. The client pays based on this document and a final invoice follows upon delivery.

4. Free samples and zero-value shipments When sending free product samples abroad, a proforma invoice showing a value of "€0" is typically required for customs.

5. Pre-approval before final invoicing Some service providers send a proforma invoice to the client for sign-off before issuing the final invoice — preventing disputes after the fact.

Proforma invoice example

A proforma invoice looks identical to a standard invoice but includes the label "PROFORMA INVOICE" or "PRO FORMA INVOICE" prominently at the top of the document.

Required elements on a proforma invoice:

• Seller name, address and VAT number
• Buyer name and address
• Document date
• Description of goods or services
• Quantities and unit prices
• Subtotal, VAT amount and total
• Currency and payment terms
• Validity period of the document
• Clear label: "PROFORMA"

What it does NOT include:

• An official invoice number (use a prefix like "PRO-" or "PF-" instead if needed)
• The label "INVOICE" without "PROFORMA"

With Bizzey, you create a proforma invoice by drafting a quote or invoice and marking it as proforma. The system automatically applies the correct label and formatting.

How to create a proforma invoice in Bizzey

Creating a proforma invoice in Bizzey takes just a few clicks:

1. Create a new quote or invoice in Bizzey
2. Add your client — company details are auto-filled from VAT number lookup
3. Add your line items with quantities and unit prices
4. Mark the document as proforma — Bizzey adjusts the formatting automatically
5. Send it by email directly from Bizzey to your client

When the client approves or the goods are delivered, convert the proforma invoice to an official invoice in one click — with an automatically assigned invoice number, ready for your VAT return.

Frequently asked questions about proforma invoices

Should VAT be shown on a proforma invoice? You can show VAT as an indication for the client, but you cannot report it in your VAT return. VAT on a proforma invoice is informational only.

Does a proforma invoice need an invoice number? No — or you can use a separate numbering series with a prefix like "PRO-" or "PF-". A proforma invoice does not receive a final invoice number.

Can a client pay based on a proforma invoice? Technically yes, but there is no legal obligation to do so. In practice, clients sometimes pay a deposit against a proforma invoice, with a final invoice to follow upon delivery.

How long is a proforma invoice valid? You decide. Common validity periods are 30 to 90 days. Always state the validity date clearly on the document.

Proforma invoice or quote: which one should I send? Send a quote when proposing a price to a potential client. Send a proforma invoice when the client has already agreed and needs a formal document for internal approval, budget sign-off or customs.

Is it "proforma invoice" or "pro forma invoice"? Both are correct. "Pro forma" is the original two-word Latin form; "proforma" is the commonly used single-word version in business contexts. Either is acceptable on your documents.