Pro-forma Invoice Explained: When and How to Use It

What's a Pro-Forma Invoice?

A pro-forma invoice is a preliminary invoice issued before work is completed or goods are shipped. It's a quotation, estimate, or statement of intent — not a legally binding invoice.

Pro-Forma vs Standard Invoice

	Pro-Forma	Standard Invoice
Issued when	Before delivery/completion	After delivery/completion
Purpose	Quote or estimate	Payment request
Legally binding	No	Yes
Payment expected	Not immediately	Yes, per payment terms
VAT reported	No	Yes

When to Use a Pro-Forma Invoice

• Large projects — You want to quote before committing
• New clients — You want approval before starting work
• International sales — Customs pre-clearance before shipment
• Conditional sales — The order hasn't been finalized yet

Format

A pro-forma looks like a standard invoice but marked clearly:

PRO-FORMA INVOICE
(Not an official invoice — for quotation purposes only)

Your Company Details
123 Business Lane
London, EC1A 1BB

Customer: ABC Ltd
Date: 15 May 2026

Description of Services/Goods
─────────────────────────────
Website redesign: £2,500
Additional pages: £500
Revision rounds (3): Included
─────────────────────────────
Estimated Total: £3,000

Note: This is a pro-forma invoice. Once you approve, we will proceed and issue a formal invoice upon completion.

Important: Don't Confuse Pro-Forma with Actual Invoice

Never include a pro-forma in your VAT records or accounts. It's not a valid VAT invoice. Once work is done, issue a proper invoice with a unique sequential number.

FAQ

Can I charge VAT on a pro-forma?

No. It's not a legal invoice, so VAT doesn't apply. Only charge VAT on the final invoice.

What if the customer pays based on the pro-forma amount but work costs more?

Clarify in writing that the pro-forma is an estimate, not a fixed quote. Issue a revised pro-forma if costs change before starting work.