What is Proforma Invoice?

A proforma invoice is a document that looks like an invoice but serves as a preliminary quotation or commitment rather than a request for payment. Freelancers and businesses use proforma invoices to give clients a clear picture of expected costs before work begins or goods are shipped.

Key differences between a proforma invoice and a standard invoice:

• A proforma invoice is not a demand for payment
• It cannot be used to reclaim VAT
• It does not need a sequential invoice number
• It is not recorded as income in your accounts

Proforma invoices are commonly used when:

• A client needs to arrange funds or get internal budget approval before committing
• You want to confirm the scope and cost of a project before starting
• Goods are being shipped internationally and customs need to see expected values

Once the client approves the proforma and work is completed (or goods are delivered), you issue a final invoice with a proper invoice number. The final invoice replaces the proforma and becomes the official payment request.

If you frequently send estimates or quotes before starting work, a proforma invoice can formalise that step and reduce misunderstandings about pricing. OwnedWork lets you convert a proforma into a final invoice with one click.