What is a Pro forma Invoice and When Should You Use One?

Do you ever want to send your clients a quote for a job or service before you do the work? That’s where a pro forma invoice enters into the picture. We’ve pulled together the top five questions about when and how you should use pro forma invoices:

What Is a Proforma Invoice And When to Use One

What is a pro forma invoice?

A pro forma invoice is designed to outline the details and cost of a product or service. The definition of a pro forma invoice includes that it is delivered before the work is done. Unlike a traditional invoice, it is a commitment of goods or services that have yet to be delivered. A pro forma document is a confirmed purchase order that outlines goods or services a seller commits to selling. A pro forma invoice should include all those details plus the price. It’s not the same as a commercial invoice, which is a customs document for international shipping.

What is the purpose of a pro forma invoice?

Whereas a regular invoice acts as a bill for work that’s already been completed, or products that have been delivered, a pro forma invoice is an estimate or quote that’s sent before the work is done or the products are shipped. The purpose is to make sure the seller and customer are on the same page about their agreement, including the cost.

When should you use a pro forma invoice?

A pro forma invoice offers you a way to give prospective clients a quote with details about how much a job or shipment of goods will cost and why. For example, if you’re a caterer, a potential client might want to know how much you’d charge to prepare a gluten-free, three-course brunch, made with local, seasonal ingredients, for 20 people, or a pig roast for 100 guests. You would mock up some menus, calculate your costs and markups, and create a pro forma invoice to let your prospective client know how much the meal would cost.

How should you deliver a pro forma invoice?

You can deliver pro forma invoices electronically over email or through your online invoicing software. If you’re sending it via email, you can convert the document to a PDF so the details can’t be easily changed by the customer. You can also send a hard copy if your customer prefers to receive it that way.

What Is a Proforma Invoice And When to Use One

How do I send invoices online?

The best way to get started is to use online invoicing software such as Square Invoices. Square Invoices works — and it works fast. Stop chasing payments and start simplifying your workflow with Square Invoices.

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