Documentation
Proforma Invoice
A preliminary invoice issued before shipment that sets out the goods, price, and terms, used by the buyer to arrange payment, financing, or an import licence.
In depth
A proforma invoice is a firm quotation in invoice form. It is not a demand for payment and does not record a completed sale, but it carries enough detail — description, quantity, unit price, Incoterm and named place, currency, and validity — for the buyer to open a letter of credit, apply for an import permit, or release funds. Because banks and customs authorities will compare it against the later commercial invoice, the two should agree on every material point. Divergence between them is a common cause of letter-of-credit discrepancies and customs queries.
Key points
- Issued before shipment; not a demand for payment
- Used to open letters of credit and obtain import licences
- Must state the Incoterm, named place, currency, and validity
- Should match the eventual commercial invoice in every material respect