Pro Forma Invoice

Key takeaways
* A pro forma invoice is a preliminary sales document that confirms the terms of a proposed sale but is not a demand for payment.
* It estimates prices, shipping, taxes and other fees and helps prevent misunderstandings before delivery.
* For international shipments it can be used by Customs to estimate duties, but a commercial invoice must follow (typically within 120 days).

What is a pro forma invoice?

A pro forma invoice is a written confirmation of an order sent by a seller to a buyer before or with delivery of goods. It summarizes the agreed terms and provides an estimate of costs (price, shipping, taxes, fees) but does not constitute an official request for payment. The phrase pro forma means “for the sake of form,” indicating the information is provisional.

Purpose

A pro forma invoice is used to:
* Confirm the sale terms and avoid misunderstandings.
* Provide a cost estimate for buyer approvals or financing.
* Support negotiation of price, quantities, or delivery terms before finalization.
* Supply Customs with enough information to estimate duties for cross-border shipments.
* Streamline internal purchase and shipping processes.

What to include

Label the document clearly as “Pro Forma Invoice” and, where useful, add “Not an invoice.” Typical fields:
* Transaction date
* Seller and buyer contact and address
* Product descriptions and unit details
* Quantity, unit price, and estimated total
* Currency
* Estimated shipping method, weight and costs
* Estimated taxes, duties, handling fees
* Expected delivery date and terms (Incoterms if applicable)
* Payment method and terms (if agreed)
* Any customer or seller specifications, serial or model numbers
* HS (harmonized) codes for international shipments when available

For international shipments
* Include enough detail for Customs to determine duties (description, quantity, value, HS codes, origin).
* A pro forma invoice can be used temporarily for Customs, but a formal commercial invoice is generally required to follow (commonly within 120 days).

Pro forma invoice vs. final (commercial) invoice

• Pro forma invoice: preliminary, informational, not a payment demand; used before or at shipment to confirm terms and estimate costs.
• Final/commercial invoice: official billing document issued at or after delivery; constitutes a request for payment and contains complete details required for accounting and Customs.

Example

A bakery issues a pro forma invoice quoting the price and delivery date for a custom wedding cake. The customer approves the terms, the cake is delivered, and the bakery issues a formal invoice at delivery for payment. The final amount should match or be close to the pro forma estimate unless additional charges were agreed.

Legal status and changes

A pro forma invoice is not typically a legally binding demand for payment. It documents proposed terms and can be changed by mutual agreement before a final invoice is issued. If either party objects to the terms, they should renegotiate before delivery.

Bottom line

A pro forma invoice clarifies and documents the expected terms of a sale and associated costs without requesting payment. It reduces surprises at delivery, aids Customs processing for international shipments, and provides a basis for final invoicing and payment once the transaction is completed.