Proforma Invoice – What is a Proforma Invoice?

Proforma Invoice – What is a Proforma Invoice?

Creating invoices can be an exhausting task for many businesses, to help them out you need to have a proforma invoice at the initial stage. So, let’s ​define proforma invoice ​first, and then you will learn how to create a proforma invoice.

As per the definition, a ​proforma invoice​ is a document that is created for the buyer under certain circumstances – generally before creating an invoice with all the details of the sale.

Actually, a proforma invoice is not a true invoice. However, businesses prefer to send a proforma invoice in many situations than sending a finalized invoice.

For example, businesses need to issue proforma invoices before sending the actual invoice just to confirm all the details of the sale are completely finalized.

This won’t be recorded in your accounts until a true invoice is issued with the final prices and information.

How to Create a Proforma Invoice?

Businesses prefer to send proforma invoices if they want to provide a sales document for goods or services that they have not yet supplied but just to declare the value of goods for customs purposes.

To create a proforma invoice there are many ways that businesses can use, one is they can use Word/Excel invoice templates or opt for any invoicing software.

Proforma invoice with Word or Excel The most popular and effective way of creating a proforma invoice is to create it using an ​invoice template of Word​ or ​Excel​. You just need to choose your template and edit it according to your business requirement. Make sure you change the document name and title for your ease.

You then have to save the proforma invoice, attach it to an email, and manually convert it to a finalized invoice.

Proforma invoice with invoicing software Another quicker way of creating a proforma invoice is by using invoicing software. Invoicing software comes with pre-built proforma invoice templates and also allows you to add all the essential information.

Invoicing software comes with a pre-built proforma invoice template and lets you send your proforma invoice to your customer in just a few clicks.

Why Proforma Invoices?

Proforma invoices help businesses streamline their sales process. It is a simple process to make sure that goods and services reach safely to the customer and businesses get paid on time. Once you and the client agree on the prices and quantity of the goods or services as you have fulfilled all the information in the proforma invoice, you can straight away create an original invoice.

There are other benefits of using proforma invoices too: They are ideal if you do not have all the details to include in a commercial invoice ● Proforma invoices help businesses to declare the value of goods for customs purposes to have a smooth delivery process. ● They are not served as a payment demand or request. Proforma invoices are kind of an agreement so the customer knows what to expect. ●

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Some businesses request proforma invoices for their own internal sales process.