Create print-ready proforma invoices for quotes, pre-shipment approvals, and import permits
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A proforma invoice is a preliminary document that a seller sends to a buyer before goods are shipped or services are delivered. Unlike a commercial invoice, a proforma invoice is not a demand for payment — it is an estimated quotation that outlines the expected costs, quantities, and terms of a potential transaction.
Think of it as a formal quote or a pre-sale agreement. The word "proforma" comes from Latin, meaning "for the sake of form" — it shows what a final commercial invoice will look like once the sale is confirmed.
Proforma invoices are used in several key scenarios in international trade and ecommerce:
These two documents are related but serve different purposes at different stages of a transaction:
| Feature | Proforma Invoice | Commercial Invoice |
|---|---|---|
| Timing | Before shipment (pre-sale) | After sale is confirmed (with shipment) |
| Legal status | Not a demand for payment | Legal demand for payment |
| Purpose | Quote, import permit, financing | Customs clearance, duty calculation |
| Binding? | No — prices and terms may change | Yes — reflects the actual transaction |
| Required by customs? | Sometimes (for advance declarations) | Always (for every international shipment) |
| Includes HS codes? | Optional but recommended | Required by most customs authorities |
Tip: Once the buyer confirms the order, the proforma invoice should be replaced with a commercial invoice containing the final agreed terms. The two documents should reference the same invoice number for traceability.
A well-prepared proforma invoice includes these fields:
| Field | Why It Matters |
|---|---|
| Seller details | Company name, address, contact — establishes who is offering the goods |
| Buyer details | Name and address of the prospective buyer or importer |
| Proforma invoice number | Unique reference for tracking — typically prefixed "PI-" to distinguish from commercial invoices |
| Date and validity period | When the quote was issued and how long prices are guaranteed |
| Description of goods | Clear, specific descriptions with quantities, units, and unit prices |
| HS codes | Optional but useful for import permit applications and customs pre-clearance |
| Incoterms | Defines who pays for shipping, insurance, and duties — critical for accurate cost estimation |
| Payment terms | How and when payment is expected (T/T, L/C, PayPal, etc.) |
| Shipping and insurance costs | Estimated freight and insurance — helps the buyer calculate total landed cost |
| Estimated delivery date | When the buyer can expect to receive the goods |
| Bank details | Required for T/T payments and L/C applications |
| "This is not a demand for payment" | Legal disclaimer that distinguishes it from a binding commercial invoice |
Several countries in Southeast Asia require a proforma invoice as part of the import permit application process:
| Country | When PI Is Required | Authority |
|---|---|---|
| Singapore | Controlled goods (food, health products, electronics) | Singapore Customs / SFA / HSA |
| Malaysia | Most imports require an Approved Permit (AP) | Royal Malaysian Customs (RMCD) |
| Indonesia | All imports require a Surveyor Report (LS) based on PI | Ministry of Trade (Kemendag) |
| Thailand | Restricted goods (food, cosmetics, supplements) | Thai FDA / Customs Department |
| Philippines | Regulated imports (food, drugs, electronics) | Bureau of Customs / FDA Philippines |
Important: When applying for an import permit, the proforma invoice must match the final shipment closely. Significant discrepancies between the proforma and commercial invoice values can trigger customs inspections or permit rejections.
| Term | How It Works | Risk Level (Buyer) |
|---|---|---|
| T/T 30/70 | 30% deposit upfront, 70% before shipment | Medium — deposit at risk if supplier defaults |
| T/T 100% Advance | Full payment before production starts | High — entire amount at risk |
| L/C at Sight | Bank pays seller when shipping documents are presented | Low — bank guarantees payment only on proof of shipment |
| Net 30/60 | Payment due 30 or 60 days after invoice date | Very low — buyer pays after receiving goods |
| PayPal | Online payment with buyer protection | Low — disputes can be raised for non-delivery |
For Alibaba orders, T/T 30/70 is the most common arrangement. The 30% deposit secures your order, and the remaining 70% is paid once production is complete and inspection photos are provided.
No. A proforma invoice is a quotation, not a binding contract. Prices, quantities, and terms stated on a proforma invoice can change before the final sale is confirmed. However, most sellers honour proforma invoice prices within the stated validity period as a matter of business practice.
In some cases, yes — certain customs authorities accept a proforma invoice for advance cargo declarations or pre-clearance purposes. However, a commercial invoice is always required for final customs clearance and duty calculation. The proforma invoice cannot replace it.
Typical validity periods range from 7 to 30 days, depending on the industry and market volatility. For commodities with fluctuating prices (electronics components, raw materials), shorter validity periods of 7-14 days are common. For stable products, 30 days is standard.
A quotation is a simpler document that lists prices and basic terms. A proforma invoice is more formal — it looks like an invoice, includes shipping details, Incoterms, payment instructions, and can be used for import permits and bank financing. Think of it as a "dressed-up quotation" that meets international trade requirements.
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