What is a proforma invoice, and when should I send one?

What a proforma invoice means

A proforma invoice looks like an invoice but works like a detailed quote. It lists the seller, the buyer, what will be supplied, the expected price and the terms, so the buyer can prepare before the sale is final. The phrase “pro forma” means “as a matter of form”: the document follows the shape of an invoice without being the final bill.

The US International Trade Administration describes it as a quote in an invoice format. That is the most useful way to think about it. You are telling the client, “If we go ahead on these terms, this is what the invoice will say.” Nothing has been delivered yet, and the amounts can still change if the scope changes.

You may also see it written as “pro forma invoice” or “pro-forma invoice”. Some people call it a preliminary invoice or a draft invoice. The spelling does not change the meaning; the purpose of the document does.

Is a proforma invoice a proper invoice?

No. A final invoice records a sale that has happened, or a charge that is now due under your agreement. It usually carries a unique invoice number from your normal sequence, an issue date and a due date. It becomes part of your sales records and your client’s payables.

A proforma invoice records an offer or an expected charge. It should not be entered as income, and your client should not book it as money owed. In the UK, HMRC guidance says a pro-forma invoice cannot be used as evidence to reclaim VAT and should be clearly marked “this is not a VAT invoice”. If you supply the work or receive payment afterwards, HMRC expects a proper VAT invoice to follow. Rules differ elsewhere, so check what applies to you with an accountant if tax is involved.

A proforma also differs from a commercial invoice. A commercial invoice travels with an actual export shipment and is used by customs. A proforma comes earlier, often so a buyer can arrange an import license, a letter of credit or a payment approval. Most freelancers who sell services will only need the customs detail as background.

When freelancers and studios send one

Service businesses do not need a proforma for every project. It earns its place when the client needs an invoice-shaped document before work starts.

1. The client’s finance team needs a document to raise a purchase order or approve a budget.
2. You have agreed a deposit and the client wants to see the full expected bill before paying it.
3. An international client must arrange a currency transfer or an import approval in advance.
4. A grant, sponsor or parent company must approve spending before the project begins.
5. The client asks for a formal price confirmation after accepting your quote.

What to include on a proforma invoice

Include the same core details as your final invoice, plus a clear label that it is not one. The ITA’s checklist for exporters covers names and addresses, the buyer’s reference, items, unit and total prices, discounts, terms of sale and payment, an estimated date and a validity date. For services, translate those into plain project terms.

Put “Proforma invoice” in the title and add a line such as “This is not a VAT invoice” or “This is not a request for payment” where that is true. Use a separate reference for it, such as PF-2026-012, rather than taking the next number from your invoice sequence. That keeps your final invoice numbers continuous and avoids confusion when the real invoice arrives.

State how long the prices hold. A validity date of 30 days is common, but use whatever your agreement supports. Describe each deliverable in words the person approving the budget can recognize, and note the assumptions the price depends on, such as how many review rounds are included.

A worked example

Emi Studio has agreed a website refresh with Acorn Studio: 12.5 hours at $100 per hour, or $1,250. Acorn’s finance team will not release funds without an invoice-shaped document, but the work has not started. Emi sends proforma PF-2026-012 showing the $1,250 total, the deliverables, the payment terms and a validity date, labeled “Proforma invoice: not a request for payment”.

Acorn approves the budget. When the agreed billing point arrives, Emi issues Invoice #104 for $1,250 from her normal sequence. The proforma stays on file as the record of what was offered. If John Park, Acorn’s approver, later asks for brand voice edits, that becomes a proposed 1.5-hour, $150 addition with its own approval. Emi does not edit the old proforma to make it match.

Proforma invoice vs quote and estimate

A quote or estimate opens a conversation about price. A proforma usually comes after the client has said yes, when someone else in their organization needs a formal document to act on. The content overlaps a lot, which is why the ITA notes a proforma can often replace a formal quotation.

The practical difference is the audience. A quote persuades the person who chooses you. A proforma serves the person who releases the money, so it should read like the invoice they will eventually receive: same names, same line items, same totals.

Can a client pay from a proforma invoice?

Sometimes. A client may pay a deposit or prepayment using the figures on a proforma, especially for international work. If that happens, record the payment and issue the documents your tax rules require; in the UK, HMRC says receiving payment after a pro-forma means a proper VAT invoice must follow. Keep the payment, the proforma and the final invoice linked so the balance is easy to explain.

Common mistakes are easy to avoid. Do not use your final invoice number on a proforma. Do not count it as revenue or chase it as overdue. Do not leave the prices open-ended without a validity date. And do not quietly change the amounts after the client has approved them; send a revised proforma with a new reference, or agree a change first.

How Moolamochi approaches this

Moolamochi does not describe a separate proforma document type. Its closest practice is the draft: you can save and preview an invoice draft without issuing it, and issuing is a separate, explicit review by an authorized Owner, Admin or Finance member. Drafts are not receivables. Once issued, an invoice keeps its original amounts, and later approved additions create a separate supplementary draft. New access is currently waitlist-only.