What Does a Proforma Invoice Mean?
A proforma invoice (Latin for “as a matter of form”), is a preliminary invoice issued before the delivery of goods or the provision of services. It serves as a quote or estimate, informing the customer of the total amount due and the payment terms.
Significance and Benefits
Proforma invoices are significant in international trade, as they provide a detailed breakdown of the goods and services to be provided, along with the agreed-upon payment terms. They help avoid misunderstandings, facilitate customs clearance, and serve as a basis for calculating import duties and taxes. Historically, they emerged as a response to the need for a standardized document in international transactions.