Proforma Invoice vs. Invoice: What's the Difference?
Edited by Sumera Saeed || By Sawaira Riaz || Published on November 13, 2023
Proforma Invoice is a preliminary bill of sale, while Invoice is a final bill demanding payment.
Key Differences
A Proforma Invoice is a document given by the seller to the buyer before the shipment or delivery of goods, offering a detailed preview of the items and their total cost. An Invoice, on the other hand, is a request for payment, and represents an obligation on the part of the buyer to pay the seller.
Sawaira Riaz
Nov 13, 2023
The main purpose of a Proforma Invoice is to provide the buyer with a clear idea of what they can expect in the final transaction, giving them an opportunity to review the details before committing. In contrast, an Invoice is a document sent after the delivery of goods or services, certifying that the transaction has occurred and indicating the amount due.
Sawaira Riaz
Nov 13, 2023
From a legal standpoint, a Proforma Invoice isn't considered a true invoice because it doesn't have any legal standing. The Invoice, conversely, is a legally-binding document and can be used in a court of law to demand payment or prove a transaction took place.
Sawaira Riaz
Nov 13, 2023
The Proforma Invoice can be seen as a sort of “draft” or “proposal” for a transaction, whereas the Invoice is a record of the transaction itself, detailing products, quantities, and agreed prices.
Harlon Moss
Nov 13, 2023
It's typical for businesses to use a Proforma Invoice as a negotiation tool, confirming the terms of a sale. On the other hand, an Invoice, being the final document, emphasizes the establishment of debt and the expectation of payment.
Aimie Carlson
Nov 13, 2023
ADVERTISEMENT
Comparison Chart
Purpose
Serves as a preliminary bill or quotation.
Acts as a request for payment after a sale.
Sawaira Riaz
Nov 13, 2023
Time of Issuance
Issued before the delivery of goods or services.
Issued after the delivery has been made.
Sawaira Riaz
Nov 13, 2023
Nature
Considered a draft or proposal of a sale.
A record of an actual transaction.
Aimie Carlson
Nov 13, 2023
Binding Effect
Does not establish a debt or obligation to pay.
Establishes a debt and expectation of payment.
Sawaira Riaz
Nov 13, 2023
ADVERTISEMENT
Proforma Invoice and Invoice Definitions
Proforma Invoice
A Proforma Invoice is a preliminary billing statement.
Before confirming the order, the supplier sent a Proforma Invoice for review.
Sawaira Riaz
Oct 21, 2023
Invoice
An Invoice is a document demanding payment for goods or services.
After the job was completed, the contractor issued an Invoice.
Harlon Moss
Oct 21, 2023
Proforma Invoice
It serves as a commitment to goods at certain prices and terms.
The buyer agreed upon the terms presented in the Proforma Invoice.
Sawaira Riaz
Oct 21, 2023
Invoice
It establishes the buyer's obligation to pay a certain amount.
After checking the Invoice, they realized they had 30 days to make a payment.
Sawaira Riaz
Oct 21, 2023
Proforma Invoice
A Proforma Invoice outlines goods to be delivered or services to be rendered.
The Proforma Invoice listed all the items selected for purchase.
Sawaira Riaz
Oct 21, 2023
ADVERTISEMENT
Invoice
It acts as evidence of a transaction between a seller and buyer.
The company keeps every Invoice as proof of purchases made.
Aimie Carlson
Oct 21, 2023
Proforma Invoice
A Proforma Invoice is not a demand for payment.
Even after receiving the Proforma Invoice, no immediate payment was required.
Harlon Moss
Oct 21, 2023
Invoice
An Invoice typically lists products, quantities, and agreed prices.
The Invoice detailed all the items purchased during the month.
Aimie Carlson
Oct 21, 2023
Proforma Invoice
It's a tool for customs in international trade.
For customs clearance, they needed the Proforma Invoice provided by the exporter.
Harlon Moss
Oct 21, 2023
Invoice
An Invoice often includes terms of payment and payment deadlines.
According to the Invoice, a 10% late fee would be applied after 15 days.
Sawaira Riaz
Oct 21, 2023
Invoice
A detailed list of goods shipped or services rendered, with an account of all costs; an itemized bill.
Sawaira Riaz
Oct 13, 2023
Invoice
A bill; a commercial document issued by a seller to a buyer indicating the products, quantities and agreed prices for products or services that the seller has already provided the buyer with. An invoice indicates that, unless paid in advance, payment is due by the buyer to the seller, according to the agreed terms.
Sawaira Riaz
Oct 13, 2023
Invoice
The lot or set of goods as shipped or received.
The merchant receives a large invoice of goods.
Sawaira Riaz
Oct 13, 2023
Invoice
The price which a seller or dealer pays the manufacturer for goods to be sold.
Sawaira Riaz
Oct 13, 2023
Invoice
(transitive) To bill; to issue an invoice to.
I will invoice my supplier tomorrow.
Sawaira Riaz
Oct 13, 2023
Invoice
A written account of the particulars of merchandise shipped or sent to a purchaser, consignee, factor, etc., with the value or prices and charges annexed.
Sawaira Riaz
Oct 13, 2023
Invoice
The lot or set of goods as shipped or received; as, the merchant receives a large invoice of goods.
Sawaira Riaz
Oct 13, 2023
Invoice
To make a written list or account of, as goods to be sent to a consignee; to insert in a priced list; to write or enter in an invoice.
Goods, wares, and merchandise imported from Norway, and invoiced in the current dollar of Norway.
Sawaira Riaz
Oct 13, 2023
Invoice
An itemized statement of money owed for goods shipped or services rendered;
He paid his bill and left
Send me an account of what I owe
Sawaira Riaz
Oct 13, 2023
FAQs
Is a Proforma Invoice legally binding?
No, a Proforma Invoice doesn't have legal standing and doesn't establish an obligation to pay.
Sawaira Riaz
Nov 13, 2023
Why is a Proforma Invoice used?
It's used to give a buyer a clear idea of what to expect in the final transaction and often for customs in international trade.
Sawaira Riaz
Nov 13, 2023
What distinguishes an Invoice from a Proforma Invoice?
An Invoice is a legally binding demand for payment post-sale, while a Proforma Invoice is a preliminary document pre-sale.
Sawaira Riaz
Nov 13, 2023
When is an Invoice typically sent?
An Invoice is issued after the delivery of goods or completion of services.
Aimie Carlson
Nov 13, 2023
Can I demand payment with a Proforma Invoice?
No, it's not a demand for payment. It's more of a draft or proposal.
Harlon Moss
Nov 13, 2023
What is a Proforma Invoice?
A Proforma Invoice is a preliminary billing statement sent before a sale is final.
Sawaira Riaz
Nov 13, 2023
Is an Invoice a proof of transaction?
Yes, an Invoice acts as evidence of a transaction between a buyer and seller.
Aimie Carlson
Nov 13, 2023
Does an Invoice establish a debt?
Yes, it establishes the buyer's obligation to pay the amount listed.
Sawaira Riaz
Nov 13, 2023
Can a Proforma Invoice be used for tax purposes?
Typically, it's not used for tax purposes since it's not a final document of sale.
Aimie Carlson
Nov 13, 2023
Are digital Invoices as valid as paper ones?
Yes, as long as they meet the required standards and criteria of the jurisdiction.
Sawaira Riaz
Nov 13, 2023
Can I negotiate terms with an Invoice?
Typically, negotiations happen before an Invoice is issued; once it's sent, terms are considered finalized.
Sawaira Riaz
Nov 13, 2023
Is there a standard format for Invoices?
While there isn't a one-size-fits-all, many jurisdictions have specific requirements for what an Invoice must contain.
Aimie Carlson
Nov 13, 2023
What if there's an error on my Invoice?
Contact the issuer immediately to rectify the error and receive a revised Invoice.
Janet White
Nov 13, 2023
Why might I receive a Proforma Invoice instead of an Invoice?
It might be a preliminary document to confirm details of a potential transaction.
Janet White
Nov 13, 2023
Is every Proforma Invoice followed by an Invoice?
Not necessarily. A Proforma Invoice is a proposal, and the actual sale might not proceed.
Janet White
Nov 13, 2023
Do all businesses use Proforma Invoices?
Not all, but many businesses, especially those in international trade, use Proforma Invoices.
Sawaira Riaz
Nov 13, 2023
Can an Invoice be canceled?
Yes, but usually it's replaced with a corrected version or a credit note.
Janet White
Nov 13, 2023
What details are commonly found on an Invoice?
An Invoice usually lists products, quantities, agreed prices, terms of payment, and payment deadlines.
Sawaira Riaz
Nov 13, 2023
If I receive a Proforma Invoice, should I pay immediately?
No, a Proforma Invoice isn't a demand for payment. Check with the seller for specifics.
Janet White
Nov 13, 2023
What should I do if I don't recognize an Invoice?
Reach out to the issuer for clarification and verify the transaction before making any payment.
Sara Rehman
Nov 13, 2023
About Author
Written by
Sawaira RiazSawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.
Edited by
Sumera SaeedSumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.
