Proforma invoice
A proforma invoice is a preliminary invoice a seller issues before shipping the goods. It lists the buyer, the items, quantities, unit prices, the currency, the Incoterm, payment terms, validity period and the estimated ship date. Buyers and banks use it to arrange payment, open a letter of credit or apply for an import licence.
What a proforma invoice contains
A proforma invoice sits between the quotation and the commercial invoice. It carries the same information as a final invoice (buyer, seller, items, prices, Incoterm, payment terms) but is issued before the goods ship. The buyer uses it to release payment or set up trade finance.
The typical proforma invoice names the seller and buyer with full addresses. It lists each item by SKU or description, states the quantity, unit price and currency, and shows the Incoterm (FOB, CIF or DDP). It also shows payment terms, the total value, validity period and estimated ship date.
A proforma invoice is not a demand for payment and is not booked as a sale or a receivable. It carries a validity date, because prices and exchange rates move. If the order changes before shipment, the seller issues a revised proforma with a new number, so the bank and the buyer always work from one current version.
Proforma invoice vs quotation and commercial invoice
Proforma invoice
Issued before shipment as a preliminary invoice. Contains final pricing, Incoterms, payment terms and ship date. The buyer uses it to arrange payment, open a letter of credit or apply for an import licence. Customs clears the shipment on the commercial invoice instead.
Quotation
An offer to sell at the stated price and terms. The buyer reviews it, negotiates if needed, and accepts before the seller issues a proforma invoice. A quotation is a proposal; the proforma sets out the terms the seller expects to invoice.
Commercial invoice
The final invoice issued with the shipment. It is the legal document for customs clearance and payment. The buyer pays against the commercial invoice, which replaces the proforma once the goods are shipped.
When buyers and banks request a proforma invoice
A buyer who needs to transfer funds internationally or open a letter of credit will ask for a proforma invoice. The bank or customs authority needs a document that states the transaction value, the goods and the seller. The proforma is the standard form for that.
Advance payment
The buyer needs a proforma invoice to instruct their bank to transfer the deposit or full payment. The bank requires a document showing the seller, the amount, the currency and the purpose of the transfer.
Letter of credit
When payment is by LC, the buyer’s bank opens the credit based on the proforma invoice. The invoice specifies the goods, the value, the Incoterm and the ship date, which become the LC terms.
Import licence or permit
Many countries require an import licence before clearing goods. The buyer submits the proforma invoice to the import authority, which checks the goods, the value and the origin before issuing the permit.
Budgeting and approvals
Corporate and government buyers need formal documentation before releasing funds. The proforma invoice is the internal proof that the purchase is approved and the spend is committed.
How Poly9 AI handles proforma invoice pricing
A Poly9 AI certified quote is priced from your approved rules, and every quote ties back to the rule that generated it. The FOB port and lead time come from your cost recipes. Recipes hold cost in your currency, and the quote goes out in the buyer’s currency at the rate and markup you set.
When the buyer confirms the order, your team uses the quote’s items, prices, currency, FOB port and lead time when issuing the proforma invoice.
For custom products where a configuration falls outside your rules, Poly9 AI returns price on request. You quote it manually, and the proforma invoice reflects the agreed price. The system never guesses a number that could break down at the payment or customs stage.
Terms a proforma invoice connects to
Incoterms
Trade terms (FOB, CIF, EXW, DDP) that define who pays freight and insurance. A proforma invoice must state the Incoterm so the buyer knows what the price covers.
Certified quote
A quote priced from your approved rules. A certified quote gives the buyer confidence that the proforma invoice will match the quoted price and terms.
RFQ (Request for Quote)
The buyer’s initial request for pricing. After the RFQ, the seller quotes, the buyer confirms, and the seller issues the proforma invoice before production or shipment.
MOQ (Minimum Order Quantity)
The smallest order a maker accepts. MOQ, Incoterm, lead time and payment terms all appear on the proforma invoice alongside the quoted price.
Price on request
What the system returns when a configuration has no approved pricing rule. For proforma invoices, price on request means your team quotes the item manually before issuing the document.
Questions about proforma invoices
What is the difference between a proforma invoice and a quotation?
When should a seller issue a proforma invoice?
What information must a proforma invoice include?
Is a proforma invoice a customs document?
Can the price on the commercial invoice differ from the proforma?
How does Poly9 AI help with proforma invoices?
Quote with proforma-ready pricing
Poly9 AI prices every configuration from your cost recipes, shows the Incoterm and lead time, and returns price on request when a rule is missing. Create your account.