Pro forma invoice
A preliminary bill sent before goods ship or work starts, showing the expected charges. It isn't a demand for payment and isn't recorded as a receivable.
Pro forma invoices are common in international trade, where the buyer needs a document to arrange financing or import paperwork, and for orders that require prepayment.
Because nothing is owed yet, a pro forma doesn't post to accounts receivable. Once the order ships, a commercial invoice replaces it.
Related terms
- InvoiceA document a seller issues to request payment, listing what was delivered, the amount owed, the payment terms and the due date.
- Purchase order (PO)A buyer-issued document authorizing a purchase at agreed quantities and prices. Many buyers won't pay an invoice that doesn't reference a valid PO.