Glossary · Invoices and billing
Pro forma invoice
A pro forma invoice is a preliminary bill sent before work or delivery, showing what will be charged. It is a quote in invoice form, not a demand for payment.
A pro forma invoice shows what the real invoice will look like once the goods ship or the work is done: items, prices, taxes and terms. Buyers use it to get budget approval, raise a purchase order or arrange an advance payment.
It is not a tax invoice and is not entered in the accounts as a receivable. When the work is done, you issue a proper invoice with its own number.
For service firms, a pro forma is useful when a client’s procurement team needs a document before it can raise a PO. Getting the PO number at that stage avoids the classic delay where the real invoice is rejected for lacking one.
Example
Before a three-month retainer starts, an agency sends a pro forma for £15,000 so the client’s finance team can raise a purchase order. The agency then invoices against that PO at the end of each month.