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Invoicing & accounting

Proforma invoice

A proforma invoice is a preliminary quote-style document sent before delivery. It is not a demand for payment and is not recorded as a sale. Here's how it works.

Quick answer

A proforma invoice is a preliminary bill of sale sent to a buyer before goods or services are delivered. It states the estimated price, quantities and terms, but it is not a demand for payment and is not recorded as a sale in your accounts. Buyers use it to arrange payment, financing or approvals; the seller issues a final tax invoice once the deal is confirmed.

A proforma invoice looks like a normal invoice but has a different purpose: it commits nothing and settles nothing. It gives the buyer a clear, itemised statement of what a purchase would cost so they can approve a budget, arrange funds, or clear an import or procurement step before anything is delivered.

Because it is not a completed sale, a proforma invoice does not go into your books as revenue and does not carry a formal invoice number in your accounting sequence. Once the buyer confirms, you issue a proper tax invoice, and that is the document that records the sale and any VAT.

The practical rule: use a proforma (or estimate) to agree the deal, and a tax invoice to collect and record it. KAZI supports estimate-style documents that convert cleanly into a final, payable invoice.

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FAQ

Common questions

Is a proforma invoice legally binding?

A proforma invoice is generally not a demand for payment and does not by itself create an accounting entry. It is a good-faith estimate of the terms. The binding, recordable document is the final tax invoice issued once the sale is confirmed.

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

They are very similar — both are pre-sale estimates. A proforma is usually formatted like an invoice with full line items and terms, and is often used for payment, financing or customs purposes, whereas a quote is typically a simpler price offer.

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