The final invoice amount will be the same or close to the amount on the pro forma invoice. The supplier will deliver the goods after the goods will be ready and the buyer will pay when the invoice is received. A supplier will issue a Pro forma invoice on a request by the buyer before delivery of goods. When is a Proforma invoice used?Ī pro forma invoice is created before the sale actually happens. The objective to issue the proforma invoice is to help the buyer to have an understanding of goods for which he has placed an order.Īs the document is not a true invoice, it does not constitute actual sales, so no entry is made on the issue of the proforma invoice in the books of the seller for accounts receivable and the receipt of the buyer for accounts payable. quantity, price, weight, taxes and any other commissions. The document specifies the particulars of goods i.e. What is Proforma Invoice?Ī proforma invoice is a document issued by the seller to the buyer that provides information regarding the description of goods which is yet to be delivered. An invoice demands payment from the buyer for the goods being delivered to him, whereas a proforma invoice is like a dummy invoice sent to the buyer on his request, before the delivery of goods. Sometimes people get confused between invoice and proforma invoice due to its similarity.
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