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Define Pro Forma Invoice

Define Pro Forma Invoice thumbnail
A pro forma invoice is similar to a formal quote when selling goods.

A pro forma invoice is a price quote given by a seller to a buyer. It offers details of the order including sales price and fees. It is normally used for imports and exports.

  1. Price Quote

    • Before a sale occurs, a seller may offer a pro forma invoice to the buyer. This invoice is considered a price quote to offer the buyer as much information about the sale as possible. It is not a final sale, but offers the buyer a good indication of how much the sale will cost.

    Information

    • A pro forma invoice includes a lot of information for the buyer. Among the information provided is the buyers and sellers' names and addresses, the items being sold, the cost of the items, any fees associated with the sale, the terms of the sale and estimated shipping date.

    Uses

    • This form has several uses, including as a way of avoiding misunderstandings, to open a letter of credit and as documentation of currency exchanges. When a buyer receives this form, he understands all the details of the sale because it is in writing. This statement helps buyers make informed decisions about whether they want to complete the sale.

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  • Photo Credit Blue pen in front of invoice image by millann from Fotolia.com

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