What Is a Proforma Invoice?

A proforma invoice (PI) is a seller-generated document issued to a buyer that sets out the goods description, quantity, price, and the conditions of payment and shipment. The buyer accepts it and arranges payment accordingly. It's one of the first formal documents in an export order, so getting it right sets the tone for everything after.

What it does

The PI is a declaration of the seller's commitment to supply the products or services, not a demand for payment for goods already delivered. Practically, it's the document a buyer uses to:

• Confirm the deal's terms in writing before production
• Arrange payment (and, where used, open a letter of credit)
• Apply for import permissions/licences where required
• Budget and plan the purchase