Proforma invoice: what it is and how it can help you

A preliminary procedure to this is the pro forma invoice, a commercial tool
described in detail in this article.

‍

What is a pro forma invoice?

‍

Similar to a tax invoice, a pro forma invoice is sent to the customer before
the goods or services are sold.

‍

However, it is a preliminary document and can only be considered as a promise or
a commitment by the seller to deliver the goods or provide the
services that are the subject of the transaction to the buyer.

‍

Proforma invoice vs. tax invoice

‍

A pro forma invoice, unlike a tax invoice, is only an estimate and has no
accounting value. It is also not binding at the time of payment.

‍

Often the pro forma invoice is used by accountants to identify the value of services
provided if the tax invoice has not been issued.

‍

What can a pro forma invoice be used for?

‍

Firstly, it is used when an advance payment is to be cashed and
the document is sent as a notification. The proforma can also be used when a
seller is not sure that the invoice will be paid by the buyer.

‍

Other situations where the pro forma invoice can be used:

‍

• It is desired to communicate certain details of the products/services delivered/supplied;
• To obtain the import licence;
• In the case of services paid for in several instalments or subscription-type services, the document helps control cash flow;
• Improving a documentary credit.

‍

What does a pro forma invoice contain?

‍

Its content is similar to the tax invoice, containing elements such as:

‍

• Invoice name;
• Identification and payment details of the seller and buyer;
• Date of invoice;
• Name of goods or services delivered/supplied;
• Quantity;
• Value;
• Due date.

‍

What is the validity of a pro forma invoice?

‍

A pro forma invoice is for information only and can be used at most as a proposal
for sale. It is not intended as proof of payment, to be used for
invoice claims or to serve as an accounting document.

‍

It functions as a promise to honour the prices of goods or services for
the stated validity period it contains.

↪f_200D↩

Regardless of the type of financial document - pro forma invoice, tax invoice or a simple tax receipt -
all are important and should be stored securely.

‍

To save time and reduce stress, Banqup is the ideal solution!

‍

Its secure system allows users to create, send, receive, pay and
archive financial documents from their preferred device.

‍

In other words, Banqup will give you more time to focus on the important
aspects of your business.

‍

‍