Proforma Invoice

A proforma invoice is a preliminary bill you send before the work is done or goods are shipped. It's essentially a formal quote in invoice format — it shows the client exactly what they'll be charged, including line items, quantities, rates, taxes, and payment terms. Unlike a tax invoice, a proforma is not a demand for payment and has no legal standing for tax purposes.

Freelancers and agencies use proforma invoices in several situations: when a client needs internal budget approval before committing, when billing international clients who need the document for customs or foreign exchange purposes, or when you want to confirm pricing before issuing the final tax invoice.

In India, a proforma invoice is not a valid document for GST input tax credit. Your client cannot use it for tax filing. Once the work is completed or payment is due, you must issue a proper tax invoice with your GSTIN, SAC code, and tax breakup. Mark proforma invoices clearly — "PROFORMA INVOICE" in the header — to avoid confusion.

The key difference: a proforma invoice says "this is what it will cost." A tax invoice says "this is what you owe." Keep them separate in your numbering sequence. Most businesses use a different prefix (PI-001 vs INV-001) to distinguish between the two.

You can create both proforma and final invoices using PropCraft's invoice generator — switch between document types while keeping the same line items and client details.