What Is a Pro Forma Invoice?
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Talk to our experts- Pro forma invoice
- A pro forma invoice is a quote in invoice format: the seller's advance statement of the items, prices and terms of an order before it ships. In export sales, a buyer may need one to apply for an import license, contract for pre-shipment inspection, open a letter of credit or arrange a transfer of hard currency.
Also called: proforma invoice
How it works
In export selling, the pro forma belongs to the quote stage. The International Trade Administration (trade.gov) files it under documentation for providing a quote to a potential foreign buyer, and says it contains much of the same information as the formal quotation and in many cases can be used in place of one.
A pro forma may not be a required shipping document, but it can give buyers the detail they need to legally import the product. It tells the buyer, and the import authorities, the details of the future shipment, and trade.gov says changes should not be made without the buyer's consent.
Where a pro forma invoice sits in an export sale
The seller sends the items, prices, terms of sale, payment terms, ship date and validity date.
The buyer may use it to apply for an import license, open a letter of credit or arrange pre-shipment inspection.
When the goods ship, every international order requires a commercial invoice.
What it contains
trade.gov lists the same points as for a quotation:
- Seller's name and address
- Buyer's name and address
- Buyer's reference
- Items quoted
- Prices of items, per unit and extended totals
- Weights and dimensions of quoted products
- Discounts, if applicable
- Terms of sale or Incoterm used, including the delivery point
- Terms of payment
- Estimated shipping date
- Validity date
The customs meaning is different
US customs regulations use the same name for a different document. Under 19 CFR 141.85, a pro forma invoice is an importer's statement of value or the price paid, in the form of an invoice. The importer files it when not in possession of a commercial seller's or shipper's invoice.
The form lists the shipper, seller, consignee and purchaser, quantities and a full description, unit and total purchase price, which charges are and are not included, and the country of origin. Under 19 CFR 141.86(c), when merchandise is sold in transit and the original invoice cannot be obtained, a pro forma invoice showing the values and transaction of the original must be filed with the resale invoice or statement. This page explains the terms; it is not legal advice.
Example
A distributor quotes a buyer abroad for 200 cases of a product at $45 a case. The pro forma shows 200 x $45 = $9,000, less a 5% volume discount of $450, for $8,550 in total.
It also names the Incoterm, payment terms, ship date and a validity date 30 days out. In this illustration, the buyer uses it to open a letter of credit for $8,550 and then sends a purchase order on the same terms. When the goods ship, a commercial invoice goes with the international order.
On Shopify
On Shopify, B2B draft orders let you build a quoted order before the buyer pays. You can create them for orders that customers send by phone or email instead of through your online store.
- Company pricing applies. If a draft order has a B2B customer and a company location assigned, the prices, payment terms and checkout options reflect that company's settings.
- Negotiated prices. To quote a negotiated price that differs from the company's catalog pricing, you can set a custom price on the line item.
- PO number and invoice. You can add the buyer's purchase order number, then send an invoice with an optional custom message.
- Payment terms. Draft orders can carry net terms, due on fulfillment, or a fixed date. Deposit requirements on draft orders are available only on Shopify Plus.
How Uncap helps
Uncap Quotes generates clean, shareable quote documents on the fly. Each quote carries a validity window and a full revision history, and approved quotes turn straight into Shopify orders.
Sources
Frequently asked questions
What does a proforma invoice mean?
It is a quote in invoice format: the seller sets out an order's items, prices and terms in advance, so the buyer can make arrangements before the goods ship.
What comes first, PO or proforma?
The trade.gov page does not set an order. It presents the pro forma as a quote that can help negotiate an export sales agreement, and the buyer may need it to apply for an import license or open a letter of credit. As general practice, a quote comes before the buyer's order, so the purchase order follows it, but each deal sets its own sequence.
Is a proforma invoice legally binding?
trade.gov treats it as a quote and says changes should not be made without the buyer's consent. The trade.gov page does not say whether it is binding, so the terms you agree with the buyer are what to check. This page explains the terms; it is not legal advice.
Is pro forma one word or two?
Both spellings appear in official sources. trade.gov and the US customs regulations write "pro forma invoice" as two words, while the GS1 EANCOM invoice message, as published by GS1 Germany, lists "proforma invoice" as one word (document name code 325).
