Proforma invoice vs invoice: what is the difference?

A proforma invoice is a preview of a sale: it shows the customer what they will pay, but it does not make payment legally due. An invoice is the final document that records the sale, creates the debt and, in many countries, supports the VAT on it.

The two look almost the same on paper, which is why they get mixed up. The difference is what each one does. A proforma helps the customer decide, budget or arrange payment. An invoice is the record both sides book, and the one your tax authority cares about.

Proforma invoice vs invoice at a glance

When a proforma invoice makes sense

A proforma is useful whenever the customer needs a document before the sale is final. Common cases:

• Payment in advance. You want to be paid before you start, ship or book something. The proforma tells the customer exactly what to pay.
• The buyer's own approval. Many companies need a priced document to get a purchase signed off internally. A proforma gives them one without creating a debt.
• Cross-border shipments. Proformas are often used for customs paperwork or import permits when goods ship before the final invoice exists.
• A price you expect to change. If quantities or dates may still move, a proforma avoids issuing an invoice you would then have to correct.

If you are still at the stage of making an offer, the proforma usually comes later in the flow. Our guide to how a sales document flow runs from offer to invoice puts each document in order.

What a proforma invoice should contain

There is generally no fixed legal format, but a useful proforma carries:

• The title Proforma invoice, clearly, so nobody books it as a real invoice.
• Your details and the customer's.
• The goods or services, quantities, prices and the tax that will apply.
• The total, the payment terms and how long the offer stands.

Some tax authorities go further. In the UK, for example, HMRC recommends marking a pro forma invoice as not being a VAT invoice. Check the rules where you trade, with your accountant.

From proforma to final invoice

When the sale is confirmed, you issue the real invoice. It takes the next number in your invoice sequence, because many countries expect invoice numbers to run in one unbroken series; our guide to how invoice numbering works explains why. Mention the proforma on the invoice so both sides can match them, and show any advance payment the customer already made.

From then on the invoice is the document that counts. If it needs changing later, you correct it the way you correct any invoice, with a credit note; see what a credit note is and when to issue one.

How it works in Swiftly Workspace

In Swiftly Workspace on a Mac, proformas sit beside invoices and credit notes in Customer Documents, and one turns into the other with a single action:

1. Create the proforma. In the sidebar, open Finance, then Customer Documents. Click + and choose New Proforma. The new document opens with the proforma type already selected. Add its lines and finalize it the same way as an invoice; finalizing gives the proforma its own number from the proforma series.
2. Convert it. When the customer confirms, right-click the finalized proforma in the list and choose Convert to Invoice.
3. Check what will happen. The Convert to Invoice window sums it up: create a new invoice with all lines copied, assign the next available invoice number, and mark the proforma as converted, so it cannot be converted again.
4. Confirm. Click the checkmark in the toolbar (its tooltip says Convert to invoice). The new invoice opens in its own window.

The invoice keeps the proforma's customer, currency, payment terms and lines, and its due date counts from the day you convert. The proforma stays in Customer Documents for reference. A credit note can't be made from a proforma, because a proforma never created a debt to reduce.

New to the invoice window itself? How to create and finalize an invoice on Mac walks through adding lines and finalizing, and the invoice checklist is worth a look before you convert. When the customer's payment arrives, how payment allocation works covers matching it to the right invoice.

Frequently asked questions

Is a proforma invoice legally binding?

Generally not as a demand for payment: it is a preview, not a bill. It can still show the terms you offered, so treat it with care. Once the customer accepts and you deliver, the invoice is the document that makes payment due.

Can a customer pay a proforma invoice?

Yes. Paying in advance against a proforma is one of its most common uses. You then issue the invoice and show that it has already been paid, in full or in part.

Does a proforma invoice need a number?

It helps. A reference number lets you and the customer match the proforma to the later invoice and to any advance payment. Keep it separate from your invoice sequence, so the invoice numbers stay unbroken.

Should a proforma invoice show VAT?

Usually yes, so the customer knows the full amount to expect. Showing the tax does not make it a VAT invoice; in many countries the tax is accounted for on the final invoice.