What is a Pro Forma Invoice and Why to Use One?

What is a Pro Forma Invoice

Dealing into the import-export business? While carrying on your import and export business, you will often need to send a pro forma invoice to your clients. In addition, business owners who need to deal with international clients generally have to send pro forma invoices regularly. Hence, for the same- you require an Free online invoicing software that helps create a pro forma invoice.

Understanding a Pro Forma Invoice

Pro Forma is derived from Latin. It means a matter of form. It is a kind of invoice form that the seller designs for the buyer. The selling company sends a pro forma invoice to the buyer in advance of delivering the goods. Here the pro forma invoice helps the buyer get an idea about the sale price in advance of the shipment of goods.

Therefore, it is one of the most used invoices for international businesses. Further, it can be efficiently designed with the help of the Best accounting software for business.

Also, the pro forma invoice doesn’t have any specific format to follow. It just carries the most valid information about the transaction of the deal between the buyer and seller. It is used chiefly for customs clearance purposes. After presenting the pro forma invoice in the customs department, it is mandatory to present the commercial invoice within 120 days.

An online invoicing software helps you design pro forma and commercial invoices on various devices, including smartphones, desktops, tablets, and the web. So you need to look forward to downloading and installing the best online invoicing app or software for the same.

Examples of Pro Forma Invoice

Pro forma invoices are now used by various businesses, including the Exim business owners. Even a baker and designer uses pro forma invoices to give assurance to the buyer for purchasing their goods or services.

If you have the best accounting software for business, you can create a pro forma invoice on your phone. Later, after delivering the complete service or goods- you can send a commercial invoice to the opposite party.

Let’s understand an example of the same.

When you visit a photographer to book your wedding shoot, you agree to the photography fees by accepting a pro forma invoice sent by the photographer. Later, the photographer will send a final invoice after completing the shoot.

The final invoice or the commercial invoice amount is more or less the same as the pro forma invoice or the difference after being paid for the pro forma invoice.

Pro Forma Invoice

Which Business Owners Can Use Pro Forma Invoices?

Well, online invoicing software is designed for all businesses. But very few invoicing apps or software help with the creation of pro forma invoices. Below are a few industries or businesses that use pro forma invoices before delivering final services or goods.

  • Bakers
  • Banquet owners
  • Photographers
  • Manufacturers
  • Freelancers
  • Digital marketers
  • Consultants
  • Retailers
  • Wholesalers

How Pro Forma Invoice Helps Your Business?

The pro forma invoice is a preliminary bill format. It doesn’t include any invoice number or final invoice specifications, but it is considered viable as an advance invoice before delivering the final goods or services.

  • It is helpful for businesses that need to send a preliminary invoice for confirming the deal. A Pro forma invoice is also considered as a final estimate or pre-commercial invoice.
  • It is indeed the best way to get customs clearance for your goods before the final payment.
  • Purchasing department often requires confirmation. It helps in achieving the same.
  • Before creating a final invoice, a pro forma invoice is often designed to have a first copy of the invoice ready.
  • Pro forma invoices are easy to convert into invoices.

Popular and best accounting software for small businesses has got the feature to convert pro forma invoices into invoices. An online invoicing software helps the business manager convert the pro forma invoice into a final invoice with a single click. Scrolling the features of online billing software will help you determine the best invoicing solution for your small business.

Payments can also be received by sending pro forma invoices. Just like an invoice, a pro forma invoice also holds specific details that can be noted while receiving payments for pro forma invoices. The same can be detailed while sending final invoices to the client for avoiding any duplication.

Pro Forma Invoice

Wrapping the Discussion!

We have learned how online invoicing software can help the various industry owners to create and send pro forma invoices. It is a relief to have software that helps with pro forma invoices and final commercial invoices to ease the customs clearance for international business owners.

Before selecting any best accounting software for small businesses, get it checked whether or not the software helps with a complete invoicing solution, including pro forma and commercial invoice.

Read also: Simple things to know about website design.

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