What do you mean by proforma invoice?

What do you mean by proforma invoice?

A proforma invoice, additionally referred to as associate estimate or quote, is actually a preliminary bill of sale. It outlines a sellers intent to deliver merchandise or services to customers, for a selected worth. It isn’t a real bill, it is statement according to which seller has an intent to sell it’s goods or services to the potential buyer.

A proforma invoice is sent to customers ahead of the deal being finalized. It shows how much your goods or services will cost. Proforma invoices will also include the terms of sale such as payment and delivery details.

There are three important things to keep in the mind when creating and sending a proforma invoice:

  • It is not a true invoice. Issuing a proforma invoice does not mean that a customer has to make any payments on the products or services listed.
  • It is not recorded as an account receivable by the seller. Because it is not a true invoice, it is not registered as such.
  • It is not recorded as an account payable & Payroll by the customer since payment is not expected, meaning it is not marked as such.

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