Proforma invoice: meaning and booking correctly (including template)

**Have you ever heard of a pro forma invoice? No? The time has come! After all, it is an important part of your invoicing. Read here what a proforma invoice is, when it is used and how to post it. **

Table of contents:

1. Proforma invoice definition
2. Meaning
3. Contents
4. Template
5. accounting
6. Automate invoice management with GetMyInvoices

The most frequently asked questions about proforma invoices at a glance

Although proforma invoices are widely used, they are often confused with regular invoices. Basically they see conventional commercial invoices very similar, but differ significantly from them in some respects.

Definition: What is a proforma invoice

The Latin expression proforma or pro forma literally means “for the form”. Derived from this, the pro forma invoice is a document “for the sake of form”.

In contrast to a conventional commercial invoice, the proforma invoice is only issued provisionally and without a request for payment. In short: it does not trigger any payments. Basically, it is nothing more than a receipt for goods that you deliver to your customers or prospects. It is used to document the trade in goods. Typically, the proforma invoice includes information such as the item description, price and total amount to be paid, as well as any applicable taxes and fees. In this way, the buyer receives the most accurate overview possible of the expected costs of a future order.

Meaning: When is a proforma invoice issued?

If you are interested in pro forma invoices, you probably work in international trade. In order to export goods to a non-EU country (for example Switzerland or Norway), these goods must always be declared to customs. For the declaration, a commercial invoice must be available that states the value of the goods. This is where the pro forma invoice comes into play.

Thanks to it, you can send free goods to your international business partners. But since free goods also go through customs and are subject to the obligation to declare at customs, you must enclose a proforma invoice with your shipment of goods. The proforma invoice confirms that the recipient of your shipment does not pay anything for the goods. This means that no customs duties are levied on the goods because customs only takes sales prices actually paid into account. In addition, the pro forma invoice – whether within the EU or outside – is issued for the following situations:

• Deliveries of goods not intended for resale
• Free sample shipments
• Exchange of goods, for example in the case of warranty services
• Delivery against advance payment
• Delivery of free spare parts
• Gifts to customers
• Donate

In short: Proforma invoices are always used when free goods are sent and this trade or exchange of goods needs to be documented. The pro forma invoice therefore presents the commercial value of a product to customs or the tax office.

Content: This is how a proforma invoice is structured

Unlike conventional invoices, there are no legal regulations regarding structure and content that apply to proforma invoices. Despite everything, certain information is necessary for your customer as well as for customs and the tax office:

• Name, address and bank details of the sender
• Name and address of the recipient
• Delivery address, if different from the billing addressInvoice number with location and date
• Note proforma invoice
• VAT identification number or the EORI number (Economic Operators’ Registration and Identification) and the commercial register number
• Information about the purpose, for example “Free gift – for customs purposes only – no commercial value”
• Parcel number
• Type, quality, gross and net weight and quantity of the goods or goods
• Value of goods (individual value and total price)
• Costs for packaging, insurance and transport
• delivery terms
• stamp and signature

Accounting: How to correctly post a proforma invoice

The proforma invoice can be used as a replacement for invoices. You can get involved with her Expense book before the actual invoice has been received. It has a similar function to a personal receipt. Lies for yours Annual financial statements For example, if you don’t have an original invoice yet, you can pre-book the amount with a proforma invoice - for formal reasons. This means you can also claim input tax deductions and the expense booked will be charged to you Profit and loss statement . Once you have received the original invoice, you must replace the proforma invoice with it. To do this, you use a cancellation invoice and then simply post the original invoice.