Invoice generator › Proforma invoice

Proforma invoices, and where they belong

The document that gets money moving before there is anything to account for. Useful, and routinely filed in the wrong drawer.

What it is not

A proforma is not a VAT invoice. It creates no tax point, your customer cannot reclaim input VAT from it, and it does not belong in your invoice sequence. It is also not a quote: a quote offers a price, a proforma states what the invoice is going to say once the sale goes ahead.

Think of it as a rehearsal of the real document — same figures, same parties, no legal effect. The difference between quotes, estimates and invoices is set out on quote, estimate, invoice.

The three jobs it actually does

Getting paid up front. A new client abroad, no credit history in either direction, and a deposit that has to clear before work starts. A proforma gives their accounts department a document to pay against without you having recognised revenue that does not exist yet.

Getting goods through customs. When something crosses a border and there is no sale yet — samples, a repair going out and coming back, replacement parts under warranty — customs still needs a declared value. A proforma supplies one.

Unlocking a process at the other end. Import licences, letters of credit and internal purchase approvals frequently require a document before the supplier is willing to issue a real invoice. The proforma is what fills that gap.

Sending goods to a non-EU country: which document

This is where the confusion costs time. For an actual sale crossing into a non-EU country — Switzerland, the United Kingdom, anywhere outside the union — what customs expects is a commercial invoice: a real invoice, with the goods described, the value, the origin and the terms of delivery.

The proforma covers the case where there is no sale: a sample with no commercial value, a demonstration unit returning, goods sent for repair. Declaring a value on a proforma is not the same as charging it, and customs treats the two documents differently.

Sending a proforma where a commercial invoice was required is one of the ordinary reasons a shipment sits at a border for a week. Requirements vary by destination and by carrier, so confirm before the goods leave rather than after.

Switzerland, specifically

Switzerland is outside the EU customs union, so anything physical crossing that border needs paperwork regardless of how small the consignment is. For a sale, that means a commercial invoice showing the value, the description and the origin of the goods.

The proforma comes into its own for the traffic that is not a sale, and there is a lot of it in both directions across that border: a prototype going to a Swiss client for approval, a machine coming back from repair, a spare part under warranty. Declare a realistic value even when nothing is being charged — a value of zero invites questions, and "no commercial value" is a statement about the transaction, not about the goods.

The numbering mistake

Here is the one that causes real damage, quietly. Someone raises a proforma using the next number in the invoice sequence, the deal falls through, and the number is never used again. Now the sequence has a gap.

An invoice sequence with holes in it is exactly what an inspection looks for, because the innocent explanation and the guilty one produce the same pattern. Give proformas their own numbering — a separate series, a different prefix, anything that keeps them out of the fiscal sequence. The reasoning behind sequence integrity is on invoice numbering.

Mark it, unmistakably

The document should carry the words proforma invoice at the top, and it does no harm to add a line saying it is not a VAT invoice. Two reasons, and the second is the one people forget.

The first is that a client's accounts department will otherwise post it as a payable and, in some cases, attempt to recover VAT that no invoice ever charged. The second is that a proforma stripped of its label is nearly indistinguishable from a real invoice, and six months later neither of you will be able to say which document was which.

What has to follow it

A proforma is provisional by definition, so the sale that follows still needs a real invoice — even where the customer has already paid against the proforma. The payment does not turn the proforma into an invoice, and until the real one is issued the money sits in your accounts against nothing.

The habit worth building: issue the invoice the same day the payment lands. Not at month end, when the proforma has already left everybody's head.

Frequently asked questions