A pro forma invoice is a preliminary bill sent to a buyer before goods are delivered or work is done. It sets out what will be supplied, the price and the terms, so the buyer can pay upfront, approve the spend or ship the goods. No sale has happened yet, so it stays out of the accounts until the final invoice is raised. It is also written proforma invoice.
When to use a pro forma invoice
Pro forma is Latin for "as a matter of form". Use one whenever someone needs exact figures before the sale is complete.
- Asking for payment upfront. For a new customer, a custom order or a deposit, the buyer pays against the pro forma and you invoice on delivery.
- Shipping goods abroad. Couriers may accept one to show the value of samples or goods sent before a sale; for a sale they normally expect the commercial invoice (GOV.UK export steps).
- Getting approval or a purchase order. Buyers' finance teams often need final figures before approving the spend.
What to include on a pro forma invoice
A pro forma should match the final invoice figure for figure, but be clearly marked PRO FORMA so nobody mistakes it for one. A simple template:
| Field | What to show |
|---|---|
| Title | PRO FORMA INVOICE, at the top |
| Parties | Your business details and the buyer's name and address |
| Reference and date | Its own reference (such as PF-001) and the issue date |
| Description | Each item or service, with quantity and unit price |
| Totals | Subtotal, delivery and total, as they will appear on the final invoice |
| Terms | What is due now (such as a 50% deposit), how to pay and how long the price holds |
| For exports | Country of origin, commodity codes, weights and Incoterms |
Pro forma invoice vs commercial invoice
A commercial (sales) invoice is issued once the goods or services are supplied, and it is what you post to your books. To make one, use our free invoice generator.
| Pro forma invoice | Commercial invoice | |
|---|---|---|
| When it's sent | Before the order is confirmed or delivered | When the goods or services are supplied |
| Purpose | Confirm the price, request upfront payment | Bill the customer for a completed sale |
| In the accounts | No entry | Posted to sales and trade debtors |
A pro forma isn't a VAT invoice, so the buyer can't use it to reclaim VAT (HMRC VATREC9010); they need the final invoice.
How to account for a pro forma invoice
A pro forma invoice has no journal, because there is no sale yet. If the buyer pays a deposit against it, record it as a payment on account: until you deliver, you owe the customer the goods or a refund, so the deposit is a liability.
A furniture maker that isn't VAT registered sends a pro forma for a £2,400 table on 3 March, asking for a 50% deposit. The customer pays £1,200 on 10 March; the table is delivered and invoiced on 31 March.
| Date | Account | Debit | Credit |
|---|---|---|---|
| 3 Mar | No entry: pro forma sent | ||
| 10 Mar | Bank | £1,200 | |
| 10 Mar | Customer deposits (liability) | £1,200 | |
| 31 Mar | Trade debtors | £2,400 | |
| 31 Mar | Sales (income) | £2,400 | |
| 31 Mar | Customer deposits (liability) | £1,200 | |
| 31 Mar | Trade debtors | £1,200 |
Allocating the deposit to the invoice clears it and leaves £1,200 in trade debtors. If a deposit covers work spread over several months, release it as it is earned, like deferred income.
How Briefcase Ledger handles pro forma invoices
In Briefcase Ledger, set the invoice up as a draft while the order is confirmed. You edit it with a live PDF preview, and nothing posts until you raise it. Raising it posts the sale to sales and trade debtors, and you can email it to the customer from Ledger.
When a deposit arrives first, record it from the bank line as a customer advance. Ledger holds it as a credit on the customer's account, and once the invoice is raised you allocate the deposit to it.
Frequently asked questions
What is a pro forma invoice in simple terms?
It is a preview of an invoice. It shows the buyer what they will be charged before the sale happens. The real invoice follows once the goods or services are supplied.
Does a pro forma invoice go in the accounts?
No. There is no sale yet, so nothing is posted to sales or trade debtors. Only a deposit paid against it is recorded, as a payment on account.
What is the difference between a pro forma invoice and a quote?
A quote gives a price to accept or decline. A pro forma comes once the buyer is ready to go ahead: it is laid out like the final invoice and usually asks for payment.
Does a pro forma invoice need an invoice number?
Give it a reference from its own sequence, such as PF-001, so your sales invoice numbers stay unbroken and nobody treats it as the final invoice.