A performa invoice, also known as a proforma invoice, is a preliminary invoice sent by a seller to a buyer before the shipment of goods or services. It provides details of the transaction, including the description of goods, quantity, unit price, total amount, and payment terms.
Proforma invoices are essential in international trade as they help to establish the terms of the transaction and serve as a basis for the issuance of a commercial invoice once the goods have been shipped. They provide transparency and facilitate communication between the buyer and seller.