A proforma invoice for services is a preliminary document sent by a seller to a buyer, outlining the details of a proposed transaction, including the services to be provided, the agreed-upon price, and payment terms. It serves as a placeholder invoice, typically issued before the actual services have been rendered. For instance, a consulting firm might issue a proforma invoice to a client, outlining the scope of the consulting services to be provided, the hourly rate, and the estimated total cost.
Proforma invoices play a crucial role in business transactions, as they provide a clear understanding of the terms and conditions of the proposed sale, preventing misunderstandings and disputes. They also streamline the billing process, as the actual invoice can be quickly generated based on the proforma invoice once the services have been completed.