Proforma invoice: what it is and what to include
What a proforma invoice is used for, how it differs from a commercial invoice, the 12 details it should include, and sample proforma lines.
Alper AzakoğluForeign trade consultant
3 min read
Updated:
What is a proforma invoice?
A proforma invoice is a preliminary invoice the seller sends before the sale, showing the products, price and terms. Think of it as a formal-looking quote: the buyer sees what it will receive, what it will pay and on what terms.
A proforma is not a tax document; it is not booked and customs does not use it as the basis of a declaration. When the sale happens, it is replaced by the commercial invoice.
What it is used for
- Quote and order confirmation: When the buyer signs and returns it, the agreed terms are in writing.
- Opening a letter of credit: The buyer’s bank often opens the credit on the basis of the proforma: how a letter of credit works.
- Formalities in the buyer’s country: Some countries require a proforma for import licences, currency transfers or advance payments.
- Advance payments: The buyer pays a deposit or the full amount against it.
Proforma vs commercial invoice
| Proforma invoice | Commercial invoice | |
|---|---|---|
| When it is issued | Before the sale, at quote or order confirmation | When the goods are shipped and the sale takes place |
| Legal nature | A quote or advance notice; not a tax document | A commercial and tax document under local law |
| Accounting | Not booked | Booked as a sale |
| At customs | Not the basis of the export declaration | The export and import declarations rely on it |
| Used for | Payment, opening a letter of credit, import licences, budgets | Collection, tax, customs and statistics |
What to put on a proforma
- Title “Proforma Invoice”, number and date
- Seller’s full legal name, address, tax number and contacts
- Buyer’s full legal name and address
- Clear product descriptions, HS code (at least 6 digits), quantity and unit
- Unit price, total and currency
- Delivery term and place (for example “FCA Kayseri, Incoterms® 2020”)
- Payment terms (advance, documents against payment, letter of credit and so on)
- Expected shipment date or lead time
- Packing, estimated gross and net weight, country of origin
- Bank details (IBAN, SWIFT)
- Validity (“This proforma is valid until …”)
- Authorised signature and company stamp
Watch out
Always state the place and the Incoterms version with the delivery term: not “FOB Turkey” but “FOB Port of Mersin, Incoterms® 2020”. A vague delivery term is the most common source of disputes about freight and risk: Incoterms 2020 in one table.
Sample proforma lines
The table shows the layout only; product names, HS codes and prices are examples.
| No | Description | Quantity | Unit price | Amount |
|---|---|---|---|---|
| 1 | Product A, 50 kg bag (HS 0000.00) | 1,000 bags | USD 12.00 | USD 12,000.00 |
| 2 | Product B, 25 kg bag (HS 0000.00) | 400 bags | USD 8.50 | USD 3,400.00 |
| Total (FCA Kayseri, Incoterms® 2020) | USD 15,400.00 |
Below the table come payment terms, expected shipment date, packing and weights, bank details and validity; an authorised person signs it.
Quotes written in your buyer’s language
We settle proforma, delivery and payment terms with you and run the correspondence with the buyer in English.
Frequently asked questions
Is a proforma invoice binding?
It is the seller’s offer; once the buyer signs and returns it, it can serve as an order confirmation. Write price, delivery and payment terms clearly enough that you will not need to change them.
Should VAT appear on an export proforma?
Exports are generally zero-rated or exempt from VAT in the seller’s country, so it normally does not appear. Check your local rules.
Can the commercial invoice differ from the proforma?
Only if a change in quantity or price was agreed. Under a letter of credit, the invoice must match the credit, and the credit usually follows the proforma.
How long should a proforma be valid?
There is no legal rule; set it according to your raw material and freight prices. If prices move fast, keep it short and say so on the document.
Sources
- International Chamber of Commerce (ICC), Incoterms® 2020: iccwbo.org
Author
Alper Azakoğlu
For 30 years he has worked as foreign trade consultant and foreign trade manager for manufacturers in industrial zones across Türkiye. He writes these guides from his own work in the field.