What Is a Pro Forma Invoice? Definition and Example
By Markets & Investing DeskUpdated Nov 10, 2026
Definition
A pro forma invoice is a preliminary bill of sale a seller sends before or with delivery, confirming the goods, prices and estimated extra costs. It is not a request for payment.
Key takeaways
- A pro forma invoice is a preliminary sales document, sent by the seller before or with delivery, listing goods, prices and estimated extra costs.
- It is not legally required and is not a request for payment, but it can prevent disputes when the order arrives.
- Customs officials can use it to assess duties. In the U.S., a commercial invoice must follow within 120 days.
- The final invoice should match the pro forma amount or come close to it.
A pro forma invoice is a preliminary bill of sale that a seller sends to a buyer before goods are delivered, or together with the delivery. It confirms what was ordered, at what price, and what extra charges such as shipping, handling and taxes are expected to be. It is not a demand for payment and is not a true invoice. It is a good-faith statement of the terms the final invoice is expected to reflect. “Pro forma” is Latin for “for the sake of form,” and the term signals that the figures are projections rather than settled amounts.
How a pro forma invoice works
The document sits between the agreement and the bill. Once a buyer and seller settle the terms of an order, the seller restates those terms on a pro forma invoice and sends it to the buyer. The buyer reviews it, confirms or objects, and the deal moves forward on that basis. When the goods ship or are delivered, the seller issues the final (commercial) invoice, which is the actual request for payment.
Because some costs depend on factors outside the seller’s control, such as carrier rates, fuel surcharges or final shipping weight, the transport and fee lines on a pro forma invoice are estimates. The product price is usually the firm part; the add-ons are the part most likely to move.
There is no mandatory format. A pro forma invoice may look almost identical to the seller’s commercial invoice or may be a simpler document. What matters is that it is clearly marked as pro forma, so no one treats it as a bill.
What a pro forma invoice includes
Contents vary by business, but a complete pro forma invoice typically shows:
- The words “Pro Forma Invoice” and often “Not an Invoice”
- Seller and buyer names and contact details
- Date of issue and a reference number
- Description of the goods or services, including quality or specifications
- Quantity and unit price
- Estimated shipping weight and transport charges
- Handling fees, taxes and any other expected costs
- Expected delivery date
- Payment method and payment terms
- Any special conditions requested by the buyer or seller
Why businesses use pro forma invoices
Clarity before delivery. The seller communicates expected costs, fees and delivery dates up front. If the buyer disagrees with the price, quantity or timeline, the buyer can raise it and renegotiate before anything ships, rather than disputing an invoice after delivery.
Internal purchase approvals. Many organizations require a documented cost before a purchase can be approved. A pro forma invoice gives the buyer’s finance or procurement team a concrete figure to sign off on.
Advance payment and financing paperwork. When a seller asks for payment or a deposit before shipping, the buyer needs a document stating what is being paid for. A pro forma invoice often serves that role, and it can also support applications for import licenses or trade financing that require a stated value for the goods.
Pro forma invoices in international shipping
Goods entering the United States must clear Customs with specific documentation. The standard document is the commercial invoice, which must identify the buyer, seller and carrier and describe the goods, their quantity, value, payment method and other details.
A pro forma invoice is not strictly required for international shipments, but it is used when a transaction is not yet final and an estimate of the goods’ value is needed. To work for Customs purposes, it must contain enough detail for officials to determine duties from a general examination of the goods, such as:
- Estimated price
- Product description and quality
- Quantity
- Payment method
- Expected delivery time
A shipment can cross the border on a pro forma invoice, but the importer must then file a commercial invoice within 120 days. Rules differ by country, so importers elsewhere should check the requirements of the destination’s customs authority.
Example of a pro forma invoice
In a hypothetical example, a furniture maker agrees to supply a hotel with 40 lounge chairs at $250 each. Before production starts, it sends this pro forma invoice:
| Line item | Amount |
|---|---|
| 40 lounge chairs at $250 each | $10,000 |
| Estimated freight (approx. 900 kg) | $600 |
| Handling and packaging | $150 |
| Estimated sales tax (assumed 7% on goods) | $700 |
| Estimated total | $11,450 |
The hotel’s procurement team uses the $11,450 figure to approve the purchase. When the chairs ship, the actual freight comes to $640, so the commercial invoice shows $11,490. The chair price and quantity did not change; only the estimated freight line moved.
Pro forma invoice vs. commercial (final) invoice
| Pro forma invoice | Commercial (final) invoice | |
|---|---|---|
| Timing | Before or with delivery | At or shortly after delivery |
| Purpose | Confirms agreed terms and estimates costs | Requests payment |
| Figures | May include estimates | Actual amounts |
| Legal weight | Not a binding demand for payment | Official commercial document creating a payment obligation |
| Customs (U.S.) | Enough detail to assess duties; commercial invoice due within 120 days | Full required detail: parties, goods, quantity, value, place of purchase, currency, mode of transport, payment terms and method |
In accounting terms, the difference matters too. Because no sale has been completed when a pro forma invoice is issued, the seller does not record revenue or an account receivable from it. Those entries follow the commercial invoice.
Documents it is often confused with
Quote or estimate. A quote offers prices to a prospective buyer who has not yet agreed to anything. A pro forma invoice comes after the buyer commits and restates the agreed terms in invoice form.
Purchase order. A purchase order is issued by the buyer to the seller. A pro forma invoice travels the other way, from seller to buyer.
Pro forma financial statements. Companies also use “pro forma” for projected or adjusted income statements and balance sheets, such as figures prepared to show the effect of a merger. These share only the Latin label. A pro forma invoice concerns a single sales transaction, not a company’s reported results.
The abbreviation PFI is commonly used for pro forma invoice in trade documents, and the term is often written “proforma invoice” as one word. “Performa invoice” is a frequent misspelling of the same thing.
Limitations of a pro forma invoice
- It does not lock in the price of extras. The final total may differ from the estimate.
- It is not proof of sale. A buyer cannot rely on it as a receipt, and a seller cannot use it to enforce payment.
- It is only a temporary customs document. In the U.S., the commercial invoice still has to be filed.
- It can be mistaken for a bill. If not clearly labeled, it may be paid twice or booked incorrectly by the buyer’s accounts payable team.
FAQs
Can a seller cancel a pro forma invoice?
There is nothing binding to cancel. If either side wants different terms, they renegotiate and the seller issues a revised pro forma invoice.
Can a buyer pay against a pro forma invoice?
Yes, when the agreed terms call for payment or a deposit before shipment. The commercial invoice issued at delivery then records the completed sale and shows any balance still due.
The Bottom Line
Pro forma invoices matter to sellers, buyers and importers who need agreed terms on paper before goods ship. They help settle disputes early, support purchase approvals and advance payments, and can carry a shipment through U.S. Customs until the commercial invoice is filed. Label the document clearly as pro forma, and expect only the estimated add-ons such as freight to change on the final invoice.
