A proforma invoice is an introductory bill that is created by the supplier for the committed client asking for the advance payment of the product. A proforma invoice includes all the details in the invoice like name and description of the product or service, quantity, rate, and total amount of the product.
A proforma invoice is created after the quotation and before an invoice. Also, don’t consider a proforma invoice as a real invoice. It is just used for the advance payment of the invoice and kept for internal purposes only.
Why use a proforma invoice template?
Although a proforma invoice is not considered a real invoice in accounting still it holds an important place as it establishes the scope and clarity of a product or service.
Important Details - A proforma invoice includes all the important information in an invoice but as mentioned before the invoice is created once the proforma invoice has been shared with the client. So here the client knows what to expect.
Advance Payment - Proforma invoice is used as an advance payment for the work that is likely to be done in the near future. So the seller most of the time gets the payment before the start of the work which is good for the seller.
Easy Invoicing Process - Once the proforma invoice is approved by the client and payment is made for the proforma invoice, now it becomes easy for a seller to create an invoice from the already created invoice. If you are using Refens invoicing software, then you can create an invoice with a single click of an already created proforma invoice, thus helping you to save tie and effort.
Expectation - The buyer won’t get surprised by seeing the invoice as the seller has already sent them the proforma invoice so the buyer knows what to expect from the seller and the product or service and at what time.
In offline mode, you have to create a proforma invoice template in Word or Excel and then add the information required for your needs. This will take you more than a day if you are creating the proforma invoice from scratch.
And Also especially if you are creating the template in Word then you have to manually add the calculation of the proforma invoice as Word can not add the calculation automatically.
Moreover, You have to always duplicate the previous proforma invoice to create a new one and also you have to search for the proforma invoice if it gets finalized to create an invoice.
This method is both time-consuming and has lots of human effort.
In the online method, you can directly download the proforma invoice template from any of the websites and can start editing the proforma invoice. But in the end, you will again have to download the proforma invoice every time you have to create a new proforma invoice.
And again you have to search for the proforma invoice in your computer folder if you want to convert a particular proforma invoice to an invoice.
And then there is one more method online, which is using a tool like Refrens proforma invoice generator.
Here you don’t have to create the proforma invoice template form from scratch, here all the fields are pre-defined for you. You just have to fill up all the important fields that you think are important for your business transactions and boom you are ready with your proforma invoice.
Also, every proforma invoice created on Refrens is saved so you don’t need to search for them again. You can edit in the future, delete, or can cancel the proforma invoice.
As Refrens proforma invoice provides a dedicated dashboard for your proforma invoice, it becomes easy and simple for you to find a particular proforma invoice.
Here is a step-by-step guide to creating a proforma invoice using Refrens proforma invoice template.
Proforma Invoice Header
This section includes the 3 components such as the title, logo, and invoice number.
Title - Always add “Proforma Invoice” as the title of your documents so that the client won’t get confused between invoice and proforma invoice.
Business Logo - Refrens provide you the option to add a business logo at the top of the proforma invoice. It shows the professionalism of your business and by logo, most of the client gets to know whose document he is viewing.
Proforma invoice number - The proforma invoice you create must have a unique number so that it becomes easy to find the proforma invoice in the near future, which helps in creating the reports and new invoices based on the proforma invoice.
Not just the proforma invoice number, you also have to add the invoice date and due date of the document.
Proforma Invoice Body
This section includes 2 parts and it is the details of the supplier and buyer. The second part includes the product name and description.
You have to add the supplier details in the “Billed By” section when adding buyer information to the “Billed To” section of the proforma invoice. You can add details like company name, address, phone number, email address, and postal code. And if you want to add more details then you can easily use our custom field option to add more details in this section.
The second part includes the product and description section, where you add the product name with description, total quantity, rate, and the total amount of the proforma invoice. You can give additional discounts or can charge additional charges like shipping charges or freight or packaging charges as well.
Proforma Invoice Footer
This section includes the terms and conditions of the proforma invoice. You can here add the detailed terms and conditions of the product, company, return terms, shipping, and payment terms as well.
You get the option to sign the document, you can either upload the signature or can directly sign. Along with you also get additional columns such as to add attachments, notes, and bank details if you want to.
And all this data gets saved on Refrens so that if you want to create an invoice, you can convert the proforma invoice to an invoice directly.
There are a lot of websites that offer free proforma invoice templates but most of them are offline which is not useful for your business in the long run. One day you have to shift from Excel to proper invoicing software as the business grows. At that time, shifting all your data will be clumsy. It’s always a good time to use the software from the early stage of the business.
Especially if the software is free to use then you must take advantage of this opportunity and should move to invoice software and Refrens is one of those invoice software that offers users to create, manage. edit, track, and send the proforma invoice and other documents for free.
Using a proforma invoice template, all your client details and reports are stored in one place so that you can use it for later purposes. It becomes easy to convert proforma invoices to invoices with one click and no need of creating the invoice from scratch.