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Proforma Invoice

December 21, 2022
Last Updated:
July 23, 2023
5 min read

Looking for a proforma invoice? ✔️This guide will show you what it is, how to fill it out, and provide you with a free PDF template to get started.

Proforma Invoice

Table of Contents

Proforma invoices are like a handshake agreement between two businesses when making international trade deals.

They offer the details of the deal — the who, what, when, and where —so that all parties involved can confidently execute the transaction.

Find out how this vital shipping document works and get the proforma invoice form you need to ensure everything goes smoothly.

What Is a Proforma Invoice?

A proforma invoice is an itemized document that acts as a placeholder for an agreed-upon purchase or sale between two companies, indicating details about what goods are being sold and shipped, such as quantity, unit price, total cost, payment terms, delivery date, and contact information. It can also include additional details such as freight charges, insurance costs, taxes applied, and any other extra fees.

In short, it’s a preliminary invoice sent in advance of an agreed-upon transaction used to secure the buyer's commitment to purchase goods from the seller. It’s not legally binding, but it serves as a helpful reference for both sides to work out all the details before an order is submitted.

Uses of Proforma Invoice

Proforma invoices serve multiple functions in the world of international trade.

Proforma invoices are used to:

  • Establish terms and conditions of sale — by sending a proforma invoice, both parties involved in the transaction can get an understanding of what they will be receiving and when payment must be made. This helps ensure that all terms & conditions are agreed upon before the exchange takes place, avoiding any potential misunderstandings or disputes down the line
  • Obtain a commitment from a buyer for the purchase of goods — by providing a proforma invoice, the seller is able to lock in the buyer’s commitment and protect themselves if there are any changes to the terms of the sale
  • Facilitate payment for goods — the proforma invoice serves as a document to help both parties process payment for goods quickly and securely
  • Secure a letter of credit— if an international trade deal requires a letter of credit from a buyer’s bank, the proforma invoice serves as one of the documents used to secure it
  • Assist with customs clearance — the proforma invoice helps importers assess the value and accuracy of their shipments before they arrive, allowing them to make the customs clearance process simpler and faster

How to Fill out a Proforma Invoice

When creating a proforma invoice, certain components must be included in order for it to be considered complete.

Here’s what you need to know about how to fill out a proforma invoice form:

  • Shipper and consignee information — including names and addresses
  • ‍Invoice date — the date when the invoice was issued
  • Due date — the date when the invoice is due
  • Shipping method — can be either sea, air, truck, or rail
  • Type of shipment — can be either Full Container Load (FCL), Less Than Container Load (LCL), Full Truck Load (FTL), Less Than a Truck Load (LTL), Air, or Break Bulk
  • ‍Country of origin — the country where the goods were manufactured
  • Country of destination — the country where goods will be finally delivered
  • ‍Port of loading and port of discharge — seaport or airport in respective loading and discharge locations
  • Departure date — the date of delivery or handover
  • ‍Incoterms — specify which commercial term will be used
  • Shipment details — an itemized list of the goods being shipped with specific descriptions that include quantity, measurements, weight, HS codes, and SKUs
  • ‍Bank details — account information including account number and sort codes to the importer's bank account
  • Payment terms — the terms and conditions and the payment details that include accepted payment methods, currencies, and payment due date
  • ‍Cost breakdown — including the price per unit, deductions, charges, fees, taxes, and the total amount payable
  • ‍Name and signature of authorized signatories

Additionally, every proforma invoice must be labeled as such to distinguish it from a final invoice sent after the goods have been shipped and make it clear that it's not a legally binding document.

How to Create a Proforma Invoice

Creating a proforma invoice requires the same information as filling out a proforma invoice form.

To streamline the process, you can use Cargoflip's free proforma invoice template. It's a PDF document that you can customize to your needs, complete with all the information needed for a proforma invoice.

Proforma invoice template
Proforma invoice template

Smooth Sailing Ahead

Proforma invoices are a signal of good faith in international trade.  By providing one, the buyer and seller have established a level of trust before exchanging the goods. It's also an effective way to help ensure that all terms & conditions are agreed upon before any exchange takes place.

Using Cargoflip’s proforma invoice template is an excellent start for new exporters or importers who need to create a proforma invoice. With our easy-to-use template, you can generate accurate and professional proforma invoices quickly — so you can get back to what really matters: finalizing your trade deals and shipping goods smoothly.

The best part? If you enter your information once into our system and we'll automatically fill out all the required fields in your proforma invoice and any other document you need. It's as easy as that!

Don’t leave your shipping documents to chance — trust Cargoflip to help you get it done right the first time. Whether you're just starting out or a seasoned trader, you can put your accuracy on autopilot with Cargoflip's free shipping document templates.

Proforma Invoice FAQ

Can payment be made on a proforma invoice?

No, a proforma invoice is an estimate. Payments can only be made against the final invoice sent after the goods have been shipped.

Is a proforma invoice legally binding?

No, proforma invoices are not legally binding documents. They are used to provide a detailed description of goods to be shipped, the cost breakdown and payment terms before the goods have been exchanged.

What is the difference between a proforma invoice and a commercial invoice?

A proforma and a commercial invoice are two commonly confused terms. A proforma invoice is an estimate sent before the goods have been exchanged, whereas a commercial invoice is sent after the shipment has been completed and contains accurate details of the goods shipped.

What is the difference between proforma invoices and account sales?

Proforma invoices and account sales are both documents used in commerce to record a sale transaction. The main difference between the two is that proforma invoices are created before the goods have been shipped, while account sales are only issued once the goods have been shipped.

‍Can a proforma invoice be used for customs clearance?

Yes, a proforma invoice can be used for customs clearance. It is an effective way to provide all the necessary information about a shipment that is needed for customs clearance.

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