Proforma vs Commercial Invoice: Which One to Send

A proforma invoice looks like an invoice, is laid out like an invoice, and is often mistaken for one — but it demands nothing. It is a formal preview of a transaction: this is what we will supply, at this price, on these terms. Nothing is owed until you replace it with the real thing.

That distinction does real work. A proforma lets a client raise a purchase order, arrange payment, or clear customs before anything has been supplied, without creating a debt in either party's books or a tax liability in yours. Used carelessly, it creates a tax mess and an invoice you cannot enforce.

The difference, and why it matters

A commercial invoice — the ordinary invoice — is a demand for payment. It is issued on or after supply, records a receivable in your books and a payable in the customer's, and in most tax systems it fixes the point at which tax becomes due.

A proforma invoice is issued before supply. It is a good-faith statement of what a transaction will look like. It creates no receivable, no payable and no tax point, and it is not a demand for payment — which also means it is not a document you can enforce.

For the tight definition on its own, see our proforma invoice glossary entry.

Proforma and commercial invoice compared

The numbering row matters more than it looks. A proforma must not consume a number from your invoice sequence, because that sequence has to be unbroken and every number in it must correspond to an actual supply. Use a separate reference such as PF-2026-007.

When to send a proforma

Where the aim is to win the work rather than to process a payment, a quote is usually the better document. A proforma suits a deal that is essentially agreed and now needs to move through the client's finance process — often alongside a purchase order.

What a proforma must show

Everything a commercial invoice shows, with two additions and one subtraction.

• The words "Proforma Invoice", prominently. This is the single most important field.
• A statement that it is not a tax invoice and not a demand for payment.
• Its own reference number, outside your invoice sequence.
• A validity date — how long the prices and terms hold.
• Full details of both parties, itemised goods or services, quantities and prices.
• Tax shown indicatively only, clearly labelled as such — never as a charge falling due.

PROFORMA INVOICE
This is not a tax invoice and is not a demand for payment.

Proforma reference: PF-2026-007
Date:               17 August 2026
Valid until:        16 September 2026

[Both parties' full details, itemised lines and totals]

Amounts shown are indicative and include VAT at 20% for information only. A VAT invoice will be issued on supply.

Payment of this proforma will be treated as payment on account. A commercial invoice will follow once the goods or services have been supplied.

Why a proforma carries no tax

In most VAT and GST systems, tax becomes due at a tax point — usually the earlier of supply, invoicing, or payment. A proforma is deliberately none of those things: it is not a tax invoice, so issuing one does not trigger the liability.

Two practical consequences:

• Your customer cannot reclaim tax from a proforma. They need a proper tax invoice, which is why one must always follow.
• If they pay against the proforma, that payment usually does create a tax point. Receiving money is itself a trigger in many systems — so issue the commercial invoice promptly rather than waiting for delivery.

That second point is the one that causes real trouble, and it is the same mechanism that makes a deposit create a tax point, as covered in our guide to deposits and upfront payments. If you need a compliant tax invoice layout to follow up with, the VAT invoice template has the required fields, and UK suppliers can produce one directly with the UK invoice generator.

General information, not tax advice. Tax point rules vary by jurisdiction — confirm your position with an accountant.

Customs and international shipments

In international trade the two documents have distinct jobs, and this is where the terminology is most standardised.

A proforma invoice accompanies a shipment or precedes it so the buyer can arrange an import licence, a letter of credit, or payment. It declares the expected value and contents. A commercial invoice is the document customs authorities use to assess duty and clear goods — it is a required export document, and its declared value must be accurate.

Practically: never send only a proforma with goods that must clear customs, and never understate value on either document. Underdeclaring is a customs offence rather than a negotiating tactic. The broader mechanics of cross-border invoicing are covered in our guide to invoicing international clients.

Converting a proforma into a commercial invoice

• Issue it once the supply happens, or immediately on receiving payment against the proforma — whichever comes first.
• Give it the next number in your invoice sequence. Do not reuse the proforma reference.
• Reference the proforma — "Further to proforma PF-2026-007" — so both sides can match them.
• Keep the same figures unless something genuinely changed, and explain it if it did.
• Show tax as an actual charge now, not indicatively.
• Deduct anything already paid against the proforma, showing the full total and the balance.

You can create a free invoice from the same line items to keep the two documents consistent, or start from an invoice template you can reuse for both.

Common mistakes

1. Using a proforma as the final invoice. It is not a tax document, your customer cannot reclaim tax from it, and you cannot enforce it.
2. Taking a number from the invoice sequence. Breaks the unbroken sequence your records depend on.
3. Not labelling it clearly. An unlabelled proforma is just a confusing invoice.
4. Charging tax on it. Show tax indicatively and say so.
5. Never following up with the real invoice. Especially after payment, where a tax point has probably already arisen.
6. Using one to chase an overdue payment. A proforma is not a demand — you need the commercial invoice, and the process in our guide to overdue invoices.

For the neighbouring documents, see invoice vs receipt.