Proforma vs invoice and down payment invoice
When to send a proforma, a down payment invoice or the final invoice: tax effect, prepayment and export use, a worked 50% example and a checklist.
At a glance
Choose the document for the decision being made
A proforma invoice, also written pro forma (Latin for "as a matter of form"), sets out the expected invoice before anything is supplied. The US International Trade Administration calls it a quote in an invoice format, which a buyer may need to apply for an import licence, open a letter of credit or arrange a transfer of hard currency.
Compared with an ordinary quotation, a proforma usually follows an agreed order and mirrors the invoice to come, line for line. Unlike an invoice, it is not a tax invoice: HMRC, for example, does not accept a pro-forma invoice as evidence to reclaim VAT, even when it shows every VAT detail.
An ordinary invoice requests payment at the agreed billing point. A commercial invoice for a goods shipment has a further role in export and import clearance. These purposes can overlap in a transaction, but the titles are not interchangeable instructions to a bank, buyer, or customs authority. Ask what the recipient actually needs before preparing the document.
- Quotation
- Proforma invoicethis guide
- Invoicethis guide
- Receipt
- Credit note
Proforma invoice vs down payment invoice
Both can come before the goods ship, and both can ask for money in advance, but they are different documents. A proforma previews the whole sale and is not a tax invoice. A down payment invoice, also called a deposit or advance invoice, is a real invoice for part of the price: it takes the next number in your invoice series and, where tax falls due when a payment is received, it carries the tax on that part. GOV.UK’s guidance on deposits, read on 5 October 2026, says a deposit that will form part of the price creates a tax point when it is received or a VAT invoice is issued for it, whichever happens first.
Use a proforma when the buyer needs the full deal on paper before committing, for an import licence, a letter of credit or internal approval, and invoice once the sale is made. Use a down payment invoice when the buyer, often a business, has to book the advance and needs a document it can keep as an invoice. The final invoice then bills the balance and names the down payment invoice, so the two add up to the price. With the display stands below and half the price payable in advance:
- Proforma route
- one proforma for USD 1,080; the buyer pays 540 in advance; the invoice follows as agreed, and the proforma is not changed.
- Down payment invoice
- 50% of 1,080 = USD 540, numbered in the invoice series.
- Final invoice
- 1,080 − 540 = USD 540 for the balance, naming the down payment invoice.
- Check
- 540 + 540 = USD 1,080, with tax charged on each part once and only once.
| Proforma invoice | Down payment invoice | |
|---|---|---|
| What it is | previews the whole sale and is not a tax invoice | is a real invoice for part of the price |
| Use it when | when the buyer needs the full deal on paper before committing, for an import licence, a letter of credit or internal approval | when the buyer, often a business, has to book the advance and needs a document it can keep as an invoice |
| Example | one proforma for USD 1,080; the buyer pays 540 in advance; the invoice follows as agreed, and the proforma is not changed | 50% of 1,080 = USD 540, numbered in the invoice series |
Example: one order, several different questions
Imagine a proposed order of 40 display stands at USD 25 each plus USD 80 for agreed packing. The illustrative proposal subtotal is (40 x 25) + 80 = USD 1,080 before applicable taxes or other charges. A planning document should explain the stand specification, quantity, packing scope, proposed dispatch date, and how long the offer remains valid.
The buyer may first need that information for internal approval or an import-related arrangement. After acceptance, the payment request must match the actual agreed billing stage. When goods are ready for shipment, the export documents must describe what is actually shipped and meet destination requirements. A copied proposal can be wrong if the quantity, packing, recipient, or delivery arrangement changed.
Do not confuse a proforma with payment evidence
A buyer sending a purchase order is not the same event as money arriving. Likewise, a proforma, invoice, or saved PDF alone does not prove payment. Keep the acceptance record, payment request, and payment confirmation distinguishable so a colleague can tell which stage has been completed.
If an advance payment is agreed, confirm the appropriate request and later invoice treatment with the customer and your adviser. Do not assume that writing "proforma" removes tax obligations or settles the legal effect of a transaction. Rules depend on the facts and jurisdiction, not just the heading chosen for a file.
Check the export requirements separately
The International Trade Administration identifies the commercial invoice as part of export and import clearance and advises checking country-specific requirements. Product classification, shipment details, or a destination-specific form may be relevant. Confirm those requirements with the importer and an appropriate customs or shipping specialist before dispatch, rather than treating a general service invoice as an export declaration.
For the display-stand example, reconcile the actual shipped quantity with the order and packing records. Verify who is buying and who receives the shipment if those parties differ. Do not invent weights, product codes, origin information, or delivery responsibilities to fill an unfamiliar form. Resolve missing details before handing documents to the carrier.
Where QuoteBill fits, and where it does not
QuoteBill has a proforma invoice document type for this stage. Start one from an accepted quotation with "Make a proforma invoice from this quotation", or from the proforma invoice template. It keeps the lines and validity date of the quotation and prints a line saying it is a proforma invoice, not a tax invoice. When payment is due, make the invoice from the proforma; the proforma itself stays as it was. QuoteBill does not have a customs-document workflow.
A commercial invoice for export is a different document. Changing "Document name" does not turn a proforma or an invoice into a customs-ready document, and the printed heading follows the document type, not the name. If the buyer requires a commercial export invoice, use an appropriate format and have its required details reviewed separately.
- Confirm whether the recipient needs an offer, a payment request, or a shipment document.
- Reconcile quantities, prices, currency, and scope with the latest accepted order.
- Check destination-specific requirements before dispatch and leave unverified facts unresolved.
- Keep proposal, acceptance, invoice, shipment, and payment records linked but distinguishable.
Sample contracts, forms and tools
Sources
Next step: get it signed as an e-contract
536 Free Invoice, Quote & Receipt Templates
Proforma invoice template
Free proforma invoice template: goods, prices, delivery terms and a valid-until date for prepayment or an import licence. Printed as "not a tax invoice".
Free quotation generator
Download the quotation as Excel or Word with the formulas working (free for QuoteBill members), or edit it online and turn an accepted quote into an invoice.
Free invoice generator
Download the invoice as Excel or Word with working formulas (free for QuoteBill members), or edit it online with your logo and tax settings and save a PDF.
Commercial invoice template
Commercial invoice template for export: HS codes, country of origin, Incoterms, ports, weights and packages, with a declaration. Check your customs rules.
Sample shipment commercial invoice template
No commercial value invoice template for samples: swatches, prototypes and catalogs with a realistic customs value, HS codes, origin and the reason for export.