Proforma Invoice vs. Invoice — What's the Difference?
Edited by Tayyaba Rehman — By Fiza Rafique — Published on December 5, 2023
A Proforma Invoice is an initial bill of sale sent to buyers in advance of a shipment or delivery of goods, typically for custom purposes, while an Invoice is a final bill after the deal indicating quantities, prices for services the seller has provided .
Difference Between Proforma Invoice and Invoice
Table of Contents
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Key Differences
A Proforma Invoice is a preliminary bill, presented in advance of the shipment or delivery of goods. It details the value and specifications of the merchandise, providing an estimate to the buyer. Conversely, an Invoice is an official request for payment issued by the seller after the goods or services have been delivered or rendered.
Proforma Invoices are often used for customs purposes on international shipments, detailing the type and value of goods to be shipped. This contrasts with an Invoice, which is utilized primarily for billing and payment processes between the buyer and seller, serving as a legally binding document indicating the terms of the sale.
The Proforma Invoice serves as a negotiation tool between the buyer and seller before finalizing details of the transaction. In contrast, an Invoice is a confirmation of the sale and represents a formal understanding between the parties regarding the cost, quantity, and terms of the payment.
Proforma Invoices do not include a demand for payment. They provide an approximation of the final figures, facilitating the buyer's decision-making process. On the other hand, an Invoice is a demand for payment and signifies the completion of a sale, outlining exact prices and quantities.
Proforma Invoices hold no legal standing for demanding payments and are subject to change. In contrast, Invoices serve as a legal document that can be used for accounting and tax purposes, with fixed and final values that have been agreed upon by both parties.
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Comparison Chart
Purpose
Provides an estimate of costs and goods.
Requests payment for goods/services provided.
Legal Status
Not legally binding.
Legally binding document.
Timing
Issued before the final agreement.
Issued after the delivery of goods/services.
Demand for Payment
Does not demand payment.
Contains a direct demand for payment.
Role in Transactions
Used for negotiation and planning.
Used for billing and record-keeping.
Compare with Definitions
Proforma Invoice
Proforma Invoices are used to declare the value of goods for customs.
For the international order, the company issued a Proforma Invoice to ensure smooth customs clearance.
Invoice
Invoices serve as a legal document for transaction verification.
The company keeps every Invoice for tax calculation and auditing purposes.
Proforma Invoice
A Proforma Invoice is a tool for the buyer and seller to finalize the details of a sale.
Before confirming the order, the buyer requested a Proforma Invoice to review the specifics of the products.
Invoice
An Invoice is a detailed bill issued by vendors or service providers demanding payment for goods or services delivered.
After delivering the products, the vendor sent an Invoice for the total amount due.
Proforma Invoice
A Proforma Invoice is a preliminary bill of sale sent before shipment or delivery of goods.
The supplier sent a Proforma Invoice outlining the estimated costs, allowing the buyer to prepare for payment.
Invoice
Invoices are used for maintaining financial records of a business.
The accountant reconciled bank statements using the Invoice records.
Proforma Invoice
Proforma Invoices provide an estimate and are not a demand for payment.
The client received a Proforma Invoice with the projected costs, understanding that these numbers could change.
Invoice
A detailed list of goods shipped or services rendered, with an account of all costs; an itemized bill.
Proforma Invoice
A Proforma Invoice outlines the expected prices, terms, and conditions of a transaction.
Based on the Proforma Invoice, the retailer was able to allocate funds for the bulk purchase.
Invoice
The goods or services itemized in an invoice.
Invoice
To make an invoice of (goods or services).
Invoice
To send an invoice to; bill.
Invoice
A bill; a commercial document issued by a seller to a buyer indicating the products, quantities and agreed prices for products or services that the seller has already provided the buyer with. An invoice indicates that, unless paid in advance, payment is due by the buyer to the seller, according to the agreed terms.
Invoice
The lot or set of goods as shipped or received.
The merchant receives a large invoice of goods.
Invoice
The price which a seller or dealer pays the manufacturer for goods to be sold.
Invoice
(transitive) To bill; to issue an invoice to.
I will invoice my supplier tomorrow.
Invoice
(transitive) To make an invoice for (goods or services).
Invoice
A written account of the particulars of merchandise shipped or sent to a purchaser, consignee, factor, etc., with the value or prices and charges annexed.
Invoice
The lot or set of goods as shipped or received; as, the merchant receives a large invoice of goods.
Invoice
To make a written list or account of, as goods to be sent to a consignee; to insert in a priced list; to write or enter in an invoice.
Goods, wares, and merchandise imported from Norway, and invoiced in the current dollar of Norway.
Invoice
An itemized statement of money owed for goods shipped or services rendered;
He paid his bill and left
Send me an account of what I owe
Invoice
Send an bill to;
She invoiced the company for her expenses
Invoice
An Invoice indicates the agreed terms, prices, and quantities between buyer and seller.
The Invoice reflected the final agreement, demanding payment within 30 days.
Invoice
An Invoice is a formal request for payment post-transaction.
Upon project completion, the contractor issued an Invoice outlining the labor and material costs.
Common Curiosities
Do Proforma Invoices need to be paid?
No, Proforma Invoices do not demand payment; they're estimations and subject to change.
When should an Invoice be issued?
An Invoice should be issued after the delivery of goods or completion of services as a request for payment.
Can a Proforma Invoice be used for accounting purposes?
No, a Proforma Invoice is an informal document and is not used for accounting or official record-keeping.
Is an Invoice necessary for all business transactions?
Yes, issuing an Invoice is a standard practice as it provides a legal record of the sale and terms of payment.
Is an Invoice a legally binding document?
Yes, an Invoice is a legally binding document that details a transaction and requires payment from the buyer.
What distinguishes an Invoice from a receipt?
An Invoice is a request for payment, while a receipt is proof of payment already made.
Who receives the Proforma Invoice?
The Proforma Invoice is sent by the seller to the buyer, providing preliminary details of the goods/services.
What is the main purpose of a Proforma Invoice?
A Proforma Invoice provides an estimate of the costs and details of goods/services, often used for customs or preliminary negotiations.
What happens if an Invoice is not paid?
Unpaid Invoices can result in late fees, interest charges, and legal action to recover the owed amount.
Do both Proforma Invoices and Invoices require detailed descriptions of the goods or services?
Yes, both documents should provide detailed descriptions to ensure clarity and agreement on what is being bought or sold.
Can the details on a Proforma Invoice change?
Yes, the details on a Proforma Invoice are not final and can be adjusted before the final transaction.
What details are included in an Invoice?
An Invoice includes the seller’s details, customer information, date, description of goods/services, total amount due, and payment terms.
Are Proforma Invoices required for international shipping?
Often, yes. Proforma Invoices are commonly used to declare the value of goods for customs clearance.
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Written by
Fiza RafiqueFiza Rafique is a skilled content writer at AskDifference.com, where she meticulously refines and enhances written pieces. Drawing from her vast editorial expertise, Fiza ensures clarity, accuracy, and precision in every article. Passionate about language, she continually seeks to elevate the quality of content for readers worldwide.
Edited by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
