Proforma Invoice vs Commercial Invoice: When to Use Each

Both documents look almost identical. Both list goods or services, quantities, prices and a total. The difference is what they legally do: a proforma invoice proposes a transaction, while a commercial invoice demands payment for one that has happened.

Getting this wrong causes two specific problems — mis-stated books, and goods stuck at a border.

What a proforma invoice is

A proforma invoice is a good-faith preview of what the final invoice will say. It is issued before the sale is completed, and it is not a request for payment in the accounting sense. It creates no receivable for you and no payable for your client.

It is typically used to:

• Give a client a formal document to raise a purchase order or release budget.
• Request an advance or deposit before work starts.
• Declare the value of a shipment for customs before the final invoice exists.
• Confirm the details of an agreed order — quantities, specifications, delivery terms — before committing.

A proforma should be clearly labelled Proforma Invoice, carry a validity period (“valid for 30 days”), and ideally avoid using your live invoice-number sequence — a separate reference such as PF-001 prevents it being mistaken for a real invoice later.

What a commercial invoice is

A commercial invoice is the real thing: the final, legally binding request for payment issued once goods have shipped or services have been delivered. It creates the receivable in your accounts and the payable in your client’s, and it is normally the document that determines when tax becomes due.

It must carry a unique invoice number from your sequence, both parties’ full details, itemised charges, tax, the total due, and payment terms. The complete list is in what to include on an invoice.

The differences at a glance

• Timing — proforma comes before the sale; commercial comes after delivery.
• Legal weight — proforma is not binding and creates no debt; commercial is a binding demand for payment.
• Accounting — a proforma is not recorded as revenue; a commercial invoice is.
• Numbering — proforma uses a separate reference; commercial uses your official sequence.
• Tax — a proforma cannot support a tax reclaim; a commercial invoice can.
• Changeability — a proforma can be revised freely; a commercial invoice is corrected with a credit note, not edited.

How they work together in practice

A typical sequence for an export order or an advance-payment job looks like this:

1. The client accepts your quotation.
2. You issue a proforma invoice so they can raise a purchase order or pay a deposit.
3. The client pays the advance; you issue a receipt for it.
4. You deliver the goods or complete the work.
5. You issue the commercial invoice, showing the full value less the advance already paid.

The proforma does the administrative work of getting money released. The commercial invoice does the legal and accounting work of recording the sale.

A note on customs

For international shipments of physical goods, a commercial invoice is a customs document as well as a billing one. Authorities use it to assess duty, so it generally needs details that a domestic invoice does not: a description of the goods precise enough to classify them, HS tariff codes, country of origin, gross and net weights, the Incoterms agreed, and the reason for export.

A proforma is often accepted earlier in the process — for import licences or advance clearance — but it does not replace the commercial invoice at the point the goods actually move. Inaccurate values on either document cause delays and penalties, so it is not a place to be approximate.

Which should you send?

Ask one question: has the work been delivered or the goods shipped? If yes, send a commercial invoice. If no — and the client needs a formal document to raise a PO, pay a deposit, or clear customs — send a proforma.

Invora generates both free, with no signup: the proforma invoice generator for advance-payment documents, and the invoice generator for the final commercial invoice.