What is a proforma invoice?
A proforma invoice is a preliminary invoice you send before goods ship or work starts. It states what you will supply and what the buyer will owe, so they can approve it, pay in advance or use it for customs and import approvals. It is not a tax invoice and is not the final record of the sale. A commercial invoice follows once the goods are supplied. See the proforma invoice glossary entry for the short definition.
The Excel file calculates line totals, subtotal, tax, total and deposit. The Word file is a fill-in layout with the same fields. Both carry the line that says the document is not a tax invoice. The online proforma invoice generator is free, needs no signup and saves a PDF.
Proforma invoice vs commercial invoice vs quote
The three are easy to mix up because they look alike. What differs is the moment you send them and what the buyer is expected to do with them.
| Proforma invoice | Commercial invoice | Quote | |
|---|---|---|---|
| When you send it | Before shipment or payment | When goods ship or work is done | Before the buyer commits |
| Purpose | Asks for prepayment or supports customs and import approvals | Records the sale and the amount owed | Offers a price for the buyer to accept |
| Is it a tax invoice? | No | Usually, depending on your jurisdiction | No |
| Buyer pays against it? | Often, as a prepayment | Yes | No, not until accepted |
| Typical extras | Valid-until date, Incoterm, country of origin | Final quantities, tax and shipping details | Scope, assumptions, expiry |
If the buyer has not yet agreed to the price, a quote is usually the right first document. Once they have agreed and you want payment before you supply, send the proforma. When the work is done, issue the invoice. For a shipment, a packing slip lists what is in the box without prices.
What to include on a proforma invoice
These are the fields on the InvoiceTools proforma invoice generator, and what each one does on the document. Use the same list to check any template you download from elsewhere.
| Field | Why it is there | In the online generator |
|---|---|---|
| Your business, buyer and buyer email | Identifies both sides so the document can be matched to an order | Yes, edited right on the document |
| Proforma number and stage (draft, issued, paid) | Lets you track which version the buyer is looking at | Yes, stage picker with Draft, Issued and Paid |
| Date issued and valid until | A validity date stops the price standing forever | Yes, both dates |
| Line items with quantity and price | What you will supply and what each line costs | Yes, with trade presets |
| Discount, freight and insurance | Completes the total the buyer will actually pay | Yes, under extras |
| Tax that will apply (%) | Shows the full amount, but is not tax being accounted for yet | Yes, a percent field |
| Incoterm | States who pays carriage and who carries the risk on cross-border goods | Yes: EXW, FCA, FOB, CFR, CIF, CPT, CIP, DAP, DPU, DDP |
| Country of origin (optional) | Customs and import approvals often ask for it | Yes, optional |
| Payment terms | Tells the buyer when and how much to pay | Yes: 100% in advance, 50% in advance with balance before dispatch, payment before shipment, or net 30 on the real invoice |
| Currency | Sets the symbol and format | Yes: USD, CAD, MXN, GBP, EUR, AUD |
| Payment instructions | Bank details or a payment link, so the buyer can pay without asking | Yes, with bank and wallet options |
| Issued by, title and signature | Some banks and finance teams want a signature before they pay against a proforma | Yes: draw, type or upload |
| The not-a-tax-invoice line | Makes the document's status clear to the buyer and to customs | Yes, built in |
Worked example
A seller quotes three products with a 50% deposit. The numbers below are illustrative. Tax is applied here to the goods after discount; whether freight is also taxed depends on your jurisdiction.
| Description | Qty | Unit price | Line total |
|---|---|---|---|
| Widget A, standard | 40 | $12.50 | $500.00 |
| Widget B, reinforced | 25 | $18.00 | $450.00 |
| Widget C, custom length | 10 | $32.40 | $324.00 |
| Subtotal | $1,274.00 | ||
| Discount | -$74.00 | ||
| Subtotal after discount | $1,200.00 | ||
| Freight and insurance | $85.00 | ||
| Tax at 8% on $1,200.00 | $96.00 | ||
| Total | $1,381.00 | ||
| Deposit due before shipment (50%) | $690.50 | ||
| Balance after deposit | $690.50 |
The arithmetic: 40 x 12.50 = 500.00, 25 x 18.00 = 450.00 and 10 x 32.40 = 324.00, so the subtotal is 1,274.00. Take off the 74.00 discount to get 1,200.00. Tax at 8% on 1,200.00 is 96.00. Add 85.00 freight and insurance: 1,200.00 + 85.00 + 96.00 = 1,381.00. A 50% deposit is 690.50, which leaves a balance of 690.50. The Excel template above is set up with exactly these figures so you can see the formulas working, then replace them with your own.
Word, Excel, PDF or an online generator
Pick the one that matches how you work. None of them changes what the document is; they only change how much you have to calculate and format yourself.
| Format | Totals | Best for | Watch out for |
|---|---|---|---|
| Excel | Calculate from formulas | Repeat quotes with many lines | Less tidy to print; edit the sample rows first |
| Word | Typed by hand | A one-off document you want to restyle | Math errors are easy to make |
| Fixed once saved | Sending a final copy | A blank PDF cannot be filled in without a tool; export one from a generator instead | |
| Online generator | Calculate automatically | Incoterms, validity date and a PDF in one place | Nothing to download; you work in the browser |
Generators and downloads on InvoiceTools need no account. Template designs need a free one. If you ship goods, the proforma invoice generator has the Incoterm and country of origin fields that a plain Word file leaves you to add by hand.
How to use the template
- Fill in the parties. Add your business details and the buyer's name, address and email.
- Set the dates. Add the date issued and a valid-until date so the price is not open forever.
- Add the lines. Describe each item or service, with quantity and unit price.
- Add the extras. Enter any discount, freight and insurance, and the tax rate that will apply. For cross-border goods, add the Incoterm and country of origin.
- State the payment terms. Say how much is due up front and how the buyer pays, with bank details or a payment link.
- Send it and keep a copy. When the goods ship, issue the invoice that accounts for the sale. Do not reuse the proforma as the final bill.
Frequently asked questions
What is a proforma invoice template?
It is a ready-made layout for a preliminary invoice that you send before goods ship or work starts. It lists what you will supply, the price, the terms and how the buyer can pay. You fill in the buyer, lines and totals, then send it so the buyer can approve, prepay or clear customs. It is not a tax invoice, so it normally says so on the page.
Is a proforma invoice the same as a commercial invoice?
No. A proforma invoice is sent before the sale is complete and estimates what the buyer will owe. A commercial invoice is issued once the goods ship or the work is done, and it is the document that records the sale. For cross-border shipments, customs often asks for a commercial invoice, and some countries also accept a proforma for goods with no commercial value. Check the rules of the countries you ship to.
Is a proforma invoice legally binding?
It is generally a preliminary document, not the final record of a sale. Whether it becomes part of a contract depends on what both sides agreed and on local law, so treat it as a firm offer only if you intend to honor it. Put a valid-until date on it so the price does not stand forever. This is general information, not legal advice.
Can I get a proforma invoice template in Word or Excel?
Yes. Both are on this page, free: an Excel file with working formulas for line totals, subtotal, tax, total and deposit, and a Word file you fill in by hand. If you want a PDF, the online proforma invoice generator saves one for you.
Do I charge tax on a proforma invoice?
A proforma invoice is not a tax invoice, so no tax is being accounted for on it yet. Many sellers still show the tax that will apply so the buyer sees the full amount they will pay. The tax invoice that follows the supply is the document that accounts for it. Which tax applies is a question for your tax adviser or local tax authority.
Does a proforma invoice need an Incoterm?
Only when the goods cross a border. An Incoterm such as FOB or DAP states who pays carriage and who carries the risk. For a domestic supply, leave it blank. The online generator has an Incoterms field with the ten standard terms and an optional country of origin field.
Related tools
Make the document online with the proforma invoice generator. Offer a price first with the quote generator, bill the finished work with the invoice generator, list shipment contents with the packing slip tool, or see the full list of tools. Related terms: proforma invoice, tax invoice, quote and deposit.