# What is a proforma invoice and when is it used?
A proforma invoice is a preliminary bill of sale sent to buyers before goods or services are delivered. Unlike a standard commercial invoice, a proforma invoice is not a demand for payment but rather a quote or commitment to provide products/services at specified prices and terms. Proforma invoices are commonly used in international trade for customs clearance, import/export documentation, letter of credit applications, and advance payment requests. They include similar details to regular invoices (description, quantity, price, delivery terms) but are marked "Proforma Invoice" or "For Customs Purposes Only". Key differences from commercial invoices: not recorded in accounts payable, not legally binding for payment, often followed by a final commercial invoice after delivery. Common uses include: quoting prices to international customers, providing documentation for import permits and customs valuation, securing advance payments before manufacturing, and establishing terms before formal purchase orders. Proforma invoices help buyers prepare for actual costs including duties and taxes.
## Key Takeaways
- A proforma invoice is a preliminary bill of sale sent to buyers before goods or services are delivered.
- Unlike a standard commercial invoice, a proforma invoice is not a demand for payment but rather a quote or commitment to provide products/services at specified prices and terms.
- Proforma invoices are commonly used in international trade for customs clearance, import/export documentation, letter of credit applications, and advance payment requests.
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