What Is a Proforma Invoice? Free Template & When to Use One
Before you start a project, a client may ask "can you send a quote in invoice format?" - that's usually a proforma invoice. It looks like a real invoice but isn't a demand for payment yet; it's an estimate that shows the client exactly what they'll be charged.
What Is a Proforma Invoice?
A proforma invoice is a preliminary bill of sale sent to a buyer before goods are delivered or a service is completed. It outlines the estimated cost, quantities, and terms, giving the client a clear picture of what the final tax invoice will look like - without creating any GST liability or accounting entry yet.
Proforma Invoice vs Tax Invoice
- Proforma invoice - an estimate or commitment to bill, not legally demanding payment, no GST filing impact.
- Tax invoice - the final, legally binding document issued once the sale is complete, used for GST returns and input tax credit.
Never record a proforma invoice as revenue in your books - it's a quote, not a completed sale.
When Should You Send One?
- Before starting a new project, to confirm scope and pricing with a new client.
- For international trade, where customs or import documentation often requires a proforma invoice.
- When a client's finance team needs a formal document to approve a purchase order internally.
What to Include in a Proforma Invoice
- The words "Proforma Invoice" clearly labeled at the top (not "Tax Invoice").
- Estimated item descriptions, quantities, and rates.
- Estimated tax, if applicable, clearly marked as provisional.
- A validity period ("Valid for 15 days") so pricing doesn't stay open-ended.
Turning a Proforma Into a Final Invoice
Once the client approves the estimate and the work is delivered, you convert it into a proper tax invoice with a new invoice number and finalized amounts. FlowInvoice's free invoice generator lets you create either version in seconds - just relabel the document and add your GSTIN once you're ready to bill for real.