Template of the Pro forma invoice
A pro forma invoice is a preliminary document sent to a buyer before goods are shipped or services are delivered. It outlines the expected items, quantities, prices and terms of a planned transaction – giving the buyer a detailed preview of what the final invoice will look like. A pro forma invoice is not a demand for payment and is not recorded as revenue. It is widely used in international trade for customs declarations, in domestic business to secure prepayment and as a formal price commitment before a sale is finalized.
What should a pro forma invoice include?
Because a pro forma invoice often serves as the basis for customs valuation, buyer budgeting or prepayment arrangements, it should mirror the detail of a final invoice as closely as possible.
Essential information
Document label – "Pro Forma Invoice" (clearly marked so it is never mistaken for a final invoice).
Pro forma number – a unique reference for tracking. Use a separate number series from your regular invoices (e.g. PF-001, PF-002) to avoid confusion.
Date of issue – the date the pro forma invoice is prepared.
Validity period – how long the quoted prices and terms remain valid (e.g. "Valid for 30 days"). This protects you from being held to prices after costs have changed.
Seller details – business name, address, phone, email and EIN (Employer Identification Number).
Buyer details (Bill to) – full name or business name and billing address.
Description of goods or services – a detailed, itemized list of what will be provided.
Quantity and unit price – the number of units and the price per unit for each line item.
Total amount – the expected total, clearly labeled as an estimate (not a payment demand).
Recommended additional information
Ship to address – the delivery destination, especially important for international shipments where customs require a declared destination.
Purchase order (P.O.) number – if the buyer has already issued a purchase order, reference it.
Shipping method and cost – carrier, estimated delivery time and freight charges. For international trade, include the Incoterms (e.g. FOB, CIF, DDP) so both parties know who is responsible for shipping, insurance and duties.
HS (Harmonized System) codes – product classification codes used by customs. Required for cross-border shipments and helpful even for domestic transactions involving goods that may be reshipped.
Country of origin – where the goods were manufactured. Required for customs and may affect import duties.
Currency – especially important in international trade. State the currency clearly (e.g. USD, EUR) and, if applicable, the exchange rate used.
Payment terms – how and when payment is expected (e.g. "Full prepayment by wire transfer before shipment").
Sales tax note – if applicable, include an estimated sales tax amount. If the transaction is tax-exempt (e.g. export sale), state the reason.
A pro forma invoice is not a tax document, not an accounting record and not a demand for payment. It should never be booked as revenue or used as a substitute for a final invoice. Once the transaction is completed, always issue a proper invoice for the actual amount
When and why is a pro forma invoice used?
A pro forma invoice bridges the gap between a price agreement and the final invoice. It is used in a wide range of situations, both domestic and international:
International trade and customs – Customs authorities use the pro forma invoice to assess duties and taxes on imported goods. It must include an accurate description, value, HS codes and country of origin. US Customs and Border Protection (CBP) may require a pro forma invoice when a commercial invoice is not yet available at the time of import.
Prepayment requests – When the seller requires full payment before shipping, the pro forma invoice tells the buyer exactly what to pay and how. The buyer uses it to arrange the bank transfer or letter of credit.
New client relationships – Before extending credit to a first-time buyer, a pro forma invoice sets out the terms clearly and ensures both parties agree on scope, pricing and payment before work begins.
Internal approvals and budgeting – Corporate buyers often need a document that resembles an invoice to secure budget approval or create a purchase order. A pro forma invoice gives their finance team the detail they need without triggering a payable.
Securing financing or letters of credit – Banks and trade finance providers may require a pro forma invoice as part of the documentation for issuing a letter of credit or approving trade financing.
Use a separate number series – keep pro forma invoices in a distinct sequence (PF-001, PF-002) so they are never confused with final invoices in your records.
Always include a validity period – material costs, exchange rates and shipping rates fluctuate. Without an expiration date, a buyer could accept a pro forma months later when your costs have increased.
Reference the pro forma on the final invoice – when you issue the commercial invoice, include the pro forma number. This makes reconciliation easy for both parties.
For exports, include HS codes and Incoterms – customs will assess duties based on the information in the pro forma. Missing or inaccurate codes can delay clearance and result in higher duties.
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