A preliminary invoice sent to a buyer before shipment, confirming the terms of a proposed sale.
A proforma invoice is a preliminary bill of sale sent by a seller to a buyer before the goods are shipped. It sets out the agreed products, quantities, unit prices, total value, Incoterms, payment terms and estimated shipping details.
Although it looks like a commercial invoice, a proforma invoice is not a demand for payment and is not used for accounting. Instead it serves as a formal quotation and is commonly used by the buyer to arrange financing, open a Letter of Credit, or apply for an import licence.
Once the order is confirmed and shipped, the seller issues the final commercial invoice.