A proforma invoice is a preliminary invoice that outlines the products or services to be provided, along with their respective costs. It is commonly used in international trade, where the buyer and seller may not be familiar with each other’s payment terms and conditions. A proforma invoice serves as a non-binding agreement that provides a detailed breakdown of the transaction.
Proforma invoices are beneficial for both buyers and sellers. They allow buyers to review the costs and terms of the transaction before committing to a purchase. For sellers, proforma invoices help to establish clear expectations and reduce the risk of payment disputes. Historically, proforma invoices have played a significant role in facilitating international trade, ensuring that both parties are aware of the terms and conditions of the transaction before goods are shipped.
