Proforma invoice against commercial invoice
These two documents have almost the same fields, and that is why the wrong one often gets sent. The difference is timing. A proforma comes before the sale. A commercial invoice records the sale after it is agreed.
Before the goods ship, if the buyer needs a document to act on (to open a letter of credit, apply for an import licence or raise a purchase order), send a proforma. Once the goods have shipped, customs values them on the commercial invoice. A proforma will not do.
| Proforma Invoice | Commercial Invoice | |
|---|---|---|
| When issued | Before the sale is final | When the goods ship |
| What it is | A quotation in invoice form. Usually treated as an offer. | A record of a sale that has happened. |
| Customs | Not a valuation document. Will not clear goods. | The document duty is assessed on. |
| Payment | Not a demand for payment. | A demand for payment. |
| Letter of credit | What the credit is opened against. | What is presented under the credit. |
| Validity date | Should carry one. The quote expires. | Not applicable. |
| Can change | Yes, until accepted. | Only by reissue or credit note. |
Use separate numbering
Give proformas their own number series. If they share a series with commercial invoices, you cannot tell a quotation from a sale in your own records. That becomes a real problem at audit, when somebody asks which documents are revenue. PI-2026-0041 and INV-2026-0041 are clear. Two documents both numbered 0041 are not.
The proforma becomes the letter of credit
When a buyer opens a letter of credit against your proforma, the bank copies it almost word for word. Anything vague on the proforma becomes a vague credit. A vague credit becomes a discrepancy when you present documents. Be clear about partial shipment, transhipment, the Incoterm with its named place, and exactly which documents you will present. Every loose phrase costs you later.
What changes between the two
Usually the quantity, and so the total, because what was quoted is rarely exactly what ships. That is normal. The price per unit, the Incoterm and the goods description must not change without agreeing it with the buyer. Those are the terms the buyer accepted. Changing them on the commercial invoice changes the contract. It is not a correction.
A binding quotation in invoice form, issued before shipment so the buyer can open a letter of credit or arrange an import licence.
The primary customs valuation document: what was sold, to whom, on what terms, and for how much.
+Can customs clear goods on a proforma invoice?
No. It can travel with a shipment for information, but the value is taken from the commercial invoice. Some couriers will draft an entry from a proforma for low-value shipments. That is a convenience, not a rule.
+Is a proforma invoice legally binding?
Not by itself. But it is normally treated as an offer. Once the buyer accepts it, usually by signing it and sending it back or by paying a deposit, a contract usually exists on its terms. Write it as something you are prepared to be held to.
+Do I still issue a commercial invoice afterwards?
Yes. When the goods ship, you issue a commercial invoice showing what actually went, which may differ from the proforma. Customs needs the actual figures, not the quoted ones.
+Which one does my bank want?
To open a credit, the proforma. To pay under it, the commercial invoice as part of the presentation.
Try it with a real shipment.
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