A Pro forma invoice is an estimated invoice sent by a seller to a buyer in advance of a shipment or delivery of goods. It outlines the kind and quantity of goods, their value, and other important information such as weight and transportation charges. Pro forma invoices are commonly used as preliminary invoices with a quotation, or for customs purposes in importation. They differ from a normal invoice in not being a demand or request for payment.
Pro forma invoices can be printed when needed from the following:
- Sales quotation entry for quotations of type 1 (will produce a sales order), 3 (will produce a service order) and 4 (template).
- Sales order entry for sales orders of type 1 (will produce an invoice) with a status of less than 60.
if the following situations arise:
| Banking/funding/letters of credit | Your customer requires a Pro forma invoice to present to the bank to show the scope of their investment. At this stage it is unlikely that you need to allocate stock since it is not known if the customer will be able to raise the necessary funding. This kind of document requires all fees and surcharges to be specified and included in the total amount.
To create a Pro forma invoice for this scenario, quotations are used. The quotation functionality provides the possibility to add information without allocating stock and yet be able to convert into a sales order. Since the quotation number and line is written to the sales order header line, it also provides a path from the Pro Forma invoice (the Quotation) and the final financial Invoice via the sales order. |
| Customs purpose, FOC goods | In this situation a Pro forma invoice must be sent with the goods for customs clearance. Since the goods have already been shipped the Pro forma invoice reflects the normal invoice in full. The only reasons for not sending a copy of the actual invoice with the goods could be, e.g., merge and/or periodic invoicing. |
| International trade | In some cases a Pro forma invoice could help the customer to plan for currency allocations and exchange rate issues before receiving the goods and the final invoice. |
| Bad debtor | You may have a requirement to produce a Pro forma invoice towards a “bad debtor”. The supplier does not wish to reserve stock or send any goods until the customer has transferred the payment. The Pro forma invoice will provide the customer with the necessary information. |
Details of the Pro forma invoice
The Pro forma invoice contains the following information:
| Header |
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| Line |
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| Total |
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| Standard Text codes (for 0% VAT EU) should be applied to the Pro forma invoices. | |