A proforma invoice is a preliminary invoice issued before the goods are shipped or services are rendered. It serves as a quote that outlines the terms of a sale, including the quantity, price, and payment details. For instance, if a company orders equipment from a supplier, the supplier may issue a proforma invoice specifying the cost of the equipment, shipping charges, and payment terms before the equipment is shipped.
Proforma invoices are crucial for both buyers and sellers. They allow buyers to confirm the details of the purchase and make necessary arrangements for payment. Sellers benefit from reduced payment delays and increased transparency in the sales process. Historically, proforma invoices have evolved from handwritten documents to digital formats, making them more accessible and efficient to use.