Proforma Invoice Format Templates

Proforma invoice - What is a proforma invoice?

A proforma invoice is used to request payment or confirm order details before raising the actual invoice. It keeps the accounting records clean while ensuring both parties are aligned before the sale is finalized. A proforma invoice holds all the information related to the goods or services, quantity, rate, including tax, commission, discounts, etc.

Think of it as a draft version of an invoice, it’s not recorded in the company’s books and doesn’t count as a legal or tax document.

Where proforma invoice is used -

When a seller sends a final invoice directly to a client, there’s always a chance it may get rejected due to incorrect details like pricing errors, missing information, or client-side mismatches. If that happens, the invoice still shows up in the seller’s accounting software as “payment due” or “invoice rejected”, which can mess up the reports.

To avoid that confusion, sellers first issue a proforma invoice. Since it’s not a legal entry, it can be revised, edited, or resent multiple times without affecting the accounts. Once the client approves and makes the payment, the seller simply converts that proforma invoice into a final invoice (or GST invoice) and shares it officially.

A proforma invoice is a preliminary bill shared by a seller before issuing the final invoice. In India, proforma invoice is also known as kacha bill.

Real-Life Example: Using Proforma Invoice to Keep Accounting Clean

A business named C5i, with an annual turnover exceeding 500 crore, uses Refrens proforma invoice for internal purposes.

When a client’s work is completed, C5i first creates a proforma invoice and sends it to the client. This approach keeps their invoice dashboard and accounting books clean, since proforma invoices are not legal entries.

The proforma invoice dashboard shows the status as either payment due or rejected.

• If the status is due, C5i sends reminders to the client.

• If the status is rejected, they contact the client to understand the reason. Based on the feedback, they create a new proforma invoice, as the rejected proforma invoice cannot be reused.

Once the proforma invoice is paid, C5i converts it into a GST invoice and marks it as paid. This ensures the company’s accounts, GST reports, and invoice records remain accurate and organized.

Why not use a quotation instead of a proforma invoice?

It may seem like a quotation could serve the same purpose as a proforma invoice, but it cannot.

A quotation is created and shared with a potential client to provide pricing for a product or service before any agreement or payment. It does not represent a request for payment and has no accounting or financial implications.

An invoice, on the other hand, is issued after the client has completed the payment or when payment is due, making it a formal financial record. A proforma invoice fits perfectly in between. It allows the seller to request payment from the client before issuing a final invoice, while keeping accounting books clean and avoiding rejected invoice issues.

When should a proforma invoice be issued?

A proforma invoice is primarily issued to request payment from a client before generating the final invoice.

It can also be used in the following situations:

• To request an advance payment even before the work or service has started.

• When a product is ready for delivery, ensuring the delivery process is smooth and clear for both the seller and buyer.

• To avoid cluttering accounting books with preliminary or potentially rejected invoices.

Why use a proforma invoice for your business?

1. Detailed Information

A proforma invoice outlines products or services, quantities, prices, and other important details. This ensures that both parties have a clear understanding of the upcoming transaction.

2. Advance Payment

Proforma invoices are often used to request advance payments. Once the buyer approves the proforma invoice, the seller can collect payment before delivering the goods or services. This secures the transaction for the seller.

3. Exporting and International Trade

In cross-border transactions, proforma invoices provide essential details for customs paperwork. They help calculate customs duties accurately and ensure compliance with international trade regulations.

4. Invoice Creation

Once a proforma invoice is accepted and finalized, it can be converted into a formal invoice. Using a proforma invoice generator like Refrens, businesses can convert proforma invoices into invoices instantly, saving time and reducing errors.

5. Building Trust

Issuing a proforma invoice shows professionalism and transparency. Buyers gain confidence as they understand the transaction terms and costs upfront, helping build trust between both parties.

6. Negotiation Tool

Proforma invoices allow buyers and sellers to address discrepancies or make changes before the actual transaction. This prevents misunderstandings and disputes later on.

7. Legal Protection

Proforma invoices outline terms and conditions, providing legal protection for both parties. They serve as a reference point in case of disagreements or disputes, ensuring fair business practices.

8. Internal Approval Workflow

For example, a salesperson receives a lead, converts it, and sends a quotation to the client. Once the product or service is ready, the salesperson creates a proforma invoice and sends it to their manager for approval. After approval, the proforma invoice is sent to the client. Once the payment is received on the proforma invoice, it is converted into a formal invoice. This workflow ensures accountability and smooth internal processes.

What is the difference between a proforma invoice and an invoice?

A proforma invoice and an invoice may seem similar, but they serve different purposes in business transactions.

1. Purpose of Issue

A proforma invoice is sent to request payment, advance payment, or partial payment before the final invoice is issued.

An invoice is sent after the payment is made or when payment is due, serving as an official billing document.

2. Legal Status

A proforma invoice is not a legal document. It cannot be used as a formal record for accounting purposes.

An invoice is a legal document that can be recorded in accounting books and used for tax and financial reporting.

3. Accounting Implications

The seller cannot treat a proforma invoice as accounts receivable, and the buyer cannot treat it as accounts payable.

An invoice, on the other hand, reflects actual money owed and must be recorded in the books of both seller and buyer.

Benefits of using Proforma invoice generator

1. Avoid Accounting Clutter

• Keeps books clean since proforma invoices are not recorded as financial transactions.

2. Faster Payments

• Acts as a request for payment before the final invoice.

• Helps businesses collect advance or full payments easily.

Professional Communication

• Shows professionalism, transparency, and trustworthiness in client interactions.

Time Efficiency

• Faster creation, customization, and conversion of documents using online tools.

Better Lead Conversion

• Quick and professional document sharing improves client response rates.

Legal Clarity

• Protects both buyer and seller by clearly defining terms before actual billing.

International Trade Support

• Essential for import/export businesses for customs documentation and regulatory compliance.

Advance Payment Requests

• Perfect for freelancers, consultants, and service providers to secure advance payments.

Internal Approvals

• Simplifies internal review before finalizing and sending the invoice.

Custom Orders and Negotiations

• Helps finalize specifications and prices before confirming the order.

Budget and Loan Applications

• Useful for budget approvals, loan requests, and credit applications.

Reduces Rejections

• Since proforma invoices are preliminary, they can be revised and resent without affecting books.

Transparency and Trust

• Provides clear visibility into products, prices, and terms, ensuring mutual understanding.

Secure Transactions

• Multiple payment modes ensure smooth and secure settlements.

Seamless Integration

• Works well with quotation and invoice modules in Refrens for an end-to-end business flow.

Advanced features of Refrens proforma invoice template

1. Predefined Format

• Professionally structured template for quick and error-free document creation.

• Easy for non-accounting users to fill in details within seconds.

2. Customizable Templates

• Choose from multiple proforma invoice templates.

• Customize color (240+ color options), fonts, and layout.

• Add company logo, digital signature, and custom fields.

• Option to add or remove columns, formulas, and payment details.

3. Professional Design

• Beautifully designed templates that reflect business professionalism.

• Allows personalized branding through theme colors and fonts.

4. Multiple Currency and Country Support

• Create proforma invoices in multiple currencies.

• Supports businesses across 200+ countries.

5. Integrated Payment Options

• Accept payments via UPI, debit/credit cards, net banking, wallets, or NEFT/RTGS.

• Supports Visa, Mastercard, Rupay, and Amex.

• Secure international payment options available.

• Facility to accept partial payments or advance payments.

6. Conversion Flexibility

• Easily convert accepted proforma invoices into final GST/tax invoices with one click.

• No re-entry of data required, ensuring consistency and saving time.

7. Client Management

• Store client data and avoid retyping details.

• Track communication and manage approvals seamlessly.

8. Invoice Tracking

• Send invoices via email and track if the client has opened them.

• Identify invoice status: Paid, Unpaid, Overdue, Draft, or Rejected.

Reporting and Analytics

• Generate detailed Proforma Invoice Reports and Client Reports.

• Track performance, payment trends, and client activity.

Multi-User Access

• Add multiple users and manage different businesses under one account.

Easy Sharing Options

• Send invoices via email, WhatsApp, direct link, or print/download as PDF.

Internal Workflow Management

• Enable internal approval flow where salespersons can send proforma invoices to managers for approval before sharing with clients.

Legal and Compliance Support

• Include proper tax details: GST type (CGST/SGST or IGST), rate, and amount.

• Helps in maintaining accurate pre-invoice documentation without affecting accounting books.

Shipping and Delivery Support

• Add delivery details like challan number, date, transport details, and notes.

Zero Setup Cost

• Create up to 15 documents for free.

• No signup fee, no hidden charges, same features as paid tools.

A proforma invoice template is a pre-defined format in a proforma invoice generator that allows users to fill in transaction details in a standardized, easy-to-use layout. The template ensures that even a non-accounting person can create a proforma invoice quickly and accurately.

At Refrens, the accounting and invoicing system was built to make invoice creation simple. The tool allows anyone to generate a professional proforma invoice within minutes rather than hours.

Users can fully customize the proforma invoice to match business requirements. Refrens provides a variety of templates, and you can modify the color, layout, and style according to your brand.

Customization options include:

• Adding a company logo

• Including a digital signature

• Adding custom fields and columns

• Changing invoice color and fonts

• Modifying number formats

• Adding custom formulas

• Including bank details or UPI information

• Adding shipping details

Essential elements of proforma invoice format

A proforma invoice should include all necessary details to ensure clarity, accuracy, and smooth transaction processing.

1. Title

The document must be titled “Proforma Invoice” to clearly differentiate it from regular invoices or quotations.

2. Proforma Invoice Number and Date

Include a unique proforma invoice number, the issue date, and due date. Optionally, add reference numbers such as quotation number or purchase order number for better tracking.

3. Seller Details

Add your company information including company name, address, state, country, and all contact details. Include GSTIN if your business is registered for GST.

4. Client Details

Add your client’s details such as name, address, contact information, state of supply, and GST number if applicable.

5. Product or Service Description

List the product or service name along with a detailed description.

6. Quantity and Rate

Specify the quantity and rate for each product or service.

7. Tax Rate and Amount (if applicable)

Add the GST type depending on whether the transaction is interstate or intrastate (CGST/SGST or IGST). Include the GST rate (5%, 12%, or 18%) and calculate the GST amount.

8. Shipping Details

For physical products, include shipping information such as challan number, date, transport number, and any shipping notes.

9. Terms and Conditions

Mention terms and conditions related to the product, service, and your company policies.

10. Signature

Include an authorized signature to validate the proforma invoice.

How to customize proforma using proforma invoice format?

Using a proforma invoice template, you can customize each and every detail of the proforma invoice. Add your personal/company logo, and choose from the varied options of templates and colors. Add multiple custom fields to the address section that are missing as per the requirements of your proforma invoice.

Add multiple columns to the product/service section to describe more about the product or service you are going to offer. Enable the discount column with just one click. Easy to add additional charges and change the currency format. Refrens provide the feature of changing the font heading of your proforma invoices.

What are the different proforma invoice formats?

Standard Proforma Invoice Template

• Usage - This is a versatile template used for a wide range of goods and services. It includes fundamental details required for any business transaction.
• Content - Contains information about the seller and buyer, description of products or services, quantities, unit prices, total amounts, payment terms, and shipping information.
• Applicability - Suitable for most businesses engaged in domestic or international trade where a straightforward transaction format is required.

Export Proforma Invoice Template

• Usage: Geared towards international trade, this template is used when goods are being exported from one country to another.
• Additional Details: In addition to standard details, it includes export-specific information such as HS codes (Harmonized System codes for products), country of origin, Incoterms (international commercial terms specifying shipping responsibilities), and other export-related documentation required for customs clearance.
• Importance: Helps businesses comply with export regulations and provides clarity for customs authorities in the importing country.

Service Proforma Invoice Template

• Usage - Designed for service-based businesses, this template is used when providing services instead of physical products.
• Content - Focuses on detailing the services offered, hourly rates, total cost of services, any additional charges (such as consultation fees), and specific terms related to the service agreement.
• Suitability - Ideal for consultants, freelancers, lawyers, and other professionals offering services.

Product Proforma Invoice Template

• Usage - Tailored for businesses dealing with physical products, this template is used to outline the details of products being sold.
• Content - Contains item codes, descriptions, quantities, unit prices, and total prices, and may include applicable taxes, discounts, and other charges.
• Ideal for - Retailers, wholesalers, manufacturers, and any business involved in the sale of tangible goods.

Consulting Proforma Invoice Template

• Usage - Specifically created for consulting firms and professionals providing advisory services.
• Content - Includes details of consulting services, hourly rates, total fees, case references (if applicable), and specific terms related to consulting contracts.
• Customization - Tailored to accommodate the unique billing requirements of consulting engagements.

Freelancer Proforma Invoice Template

• Usage - Freelancers and independent contractors use this template to bill clients for their services.
• Content - Contains freelancer details, description of services, hourly rates or project-based rates, total amount, payment terms, and any additional notes or instructions.
• Flexibility - Can be adapted for various freelance services like writing, graphic design, programming, etc.

Legal Proforma Invoice Template

• Usage - Law firms and legal professionals use this template for billing clients for legal services provided.
• Content - Includes details about legal services offered, hourly rates, case references, total fees, and specific terms of payment.
• Professionalism - Helps maintain a professional image and ensures clarity in billing for legal services.

Contractor Proforma Invoice Template

• Usage - Used by contractors to provide a preliminary bill outlining estimated costs and payment terms for construction, renovation, or repair services before the project completion.
• Content - Includes contractor and client information, invoice number and date, detailed description of services, cost breakdown (materials, labor, etc.), any applicable taxes or discounts, total amount, payment terms, and special instructions.
• Importance - Establishes clear expectations and transparency between the contractor and the client, ensuring both parties are on the same page regarding the project's financial aspects.

Photography Proforma Invoice Template

• Usage - Photographers use this template to bill clients for photography services, whether for events, portraits, commercial shoots, etc.
• Content - Specifies the type of photography services, hours of service, location, editing services (if included), total cost, and payment terms.
• Clarity - Clearly outlines what the photography services encompass and how much they cost for clients.

Event Planning Proforma Invoice Template

• Usage - Used by event planners to bill clients for event planning services, covering various aspects of event organization.
• Content - Includes event details, services provided (venue selection, catering, decoration, etc.), itemized costs, total amount, and payment terms.
• Detail-Oriented - Ensures clients understand the breakdown of costs associated with event planning services, promoting transparency.