What is a proforma invoice and when should you send one?
A proforma invoice is a preliminary bill of sale sent to a buyer after both sides agree on products and pricing, but before goods are shipped or an advance payment is collected. Although it is formatted just like a standard invoice, it serves as a good-faith commitment and payment request rather than a finalized accounting invoice.
A proforma invoice is a draft-style commercial document that shows the exact items, quantities, taxes, and total amount a buyer will pay once the order goes ahead. It is not an official tax invoice, does not deduct stock, and does not post a balance to accounts receivable until converted into a final sales invoice.
What information belongs on a proforma invoice and when is it used?
In everyday B2B trade, many buyers need an invoice-style document to get internal purchase approval, arrange a bank transfer for a deposit, or prepare customs and shipping paperwork. Sending a clear proforma invoice gives the buyer's finance team every figure they need before you pack a single box.
To avoid confusion with a finalized bill, the document must be clearly labeled **Proforma Invoice** and state how long the pricing remains valid. A complete proforma invoice contains four core blocks of information.
- Clear 'Proforma Invoice' header, document number, issue date, and price validity date.
- Business name, contact details, and billing/shipping addresses for both seller and buyer.
- Item names, SKUs, quantities, unit prices, line or document discounts, tax breakdown, and grand total.
- Advance payment terms, bank transfer details, estimated delivery lead time, and shipping notes.
Proforma invoice vs. quotation vs. final sales invoice
A quotation (price quote) belongs to the negotiation stage when a customer is still comparing options or adjusting quantities. A proforma invoice comes after the buyer says yes to the scope: it locks in the agreed lines in an invoice layout so the buyer can release a deposit or sign off on the purchase.
A final sales invoice is issued only when the goods or services are actually delivered. A proforma invoice is not an official tax or e-invoice document, does not reduce on-hand inventory, and creates no customer debt; only a confirmed sales invoice updates stock and accounts receivable.
Managing quotes, proforma documents, and invoices in GiroPS
In GiroPS, you can move smoothly from initial offer to final billing without retyping a single line. Pick items from your catalog, apply discounts and tax rates, and generate a clean PDF quote, proforma, or invoice document to share with your customer over WhatsApp or email in seconds.
Important note: GiroPS generates professional PDF quote, proforma, and commercial invoice documents for your business tracking and customer communication; it does not issue government-mandated official tax e-invoices. Once your customer sends the deposit or you ship the goods, convert the document with one tap into an **Order** or a **Sales Invoice** so inventory and customer balances update automatically.
Practical scenario
Example: collecting a 50% deposit on custom office furniture
An office equipment supplier agrees to provide a new accounting firm with 6 desks (unit price 4,500) and 6 ergonomic chairs (unit price 2,500) for a total of 42,000, requiring a 50% deposit before dispatch. So the buyer's finance department can authorize the wire transfer, the seller sends a PDF proforma document for 42,000 with bank details attached. At this stage, warehouse stock remains untouched. Once the 21,000 advance payment arrives, it is recorded on the customer's account, and on delivery day the document is converted into a final sales invoice—deducting the desks and chairs from stock and leaving the remaining 21,000 balance due.
Frequently Asked Questions
Is a proforma invoice an official tax or e-invoice document?
No. A proforma invoice is a preliminary commercial document used for price confirmation and advance payment requests; it is not an official tax invoice or government e-invoice and should not be booked as final revenue.
Does sending a proforma invoice deduct items from my inventory?
No. Because the sale is not yet finalized, a proforma document neither reduces your on-hand stock nor adds a receivable balance to the customer's account until it is converted into a confirmed sales invoice.
What happens if the buyer cancels after receiving a proforma invoice?
Since no inventory movement or accounting receivable was created, you do not need to issue a credit note or reversal entry—simply mark the preliminary document as canceled or declined.