Pro forma invoice

Pro forma invoice – free template

Issuing a pro forma invoice is optional, but in many cases it can be very useful for businesses. This document is often used in business as a way to communicate commercial terms between a seller and a customer, letting you clearly set out the terms of a transaction before it's finalized.

On our site you'll find a free pro forma invoice template (in XLSX format) created by TaxCoach's specialists. A pro forma template prepared by an accounting firm gives you the confidence that the document is clear, formally correct, and ready to use in your everyday business. Download the pro forma invoice template for free and make your sales process run more smoothly.

Using a ready-made template makes life much easier — especially for small and medium-sized businesses that want to put together a professional document quickly without needing an elaborate accounting system.

 

What is a pro forma invoice?

The name of this document can be a bit misleading, since a pro forma isn't an accounting document and isn't actually an invoice in the sense the tax law uses the term. The Latin phrase pro forma means "for form's sake" and refers to an act carried out without creating legal effects.

It's worth noting that "pro forma invoice" is a customary term that isn't defined in law. According to the Ministry of Finance's position, issuing a pro forma has no VAT consequences — it doesn't trigger a tax obligation or a duty to pay tax. Nor does the document give the buyer any basis for deducting VAT.

Importantly, issuing a pro forma invoice doesn't relieve a business of the obligation to issue a proper VAT invoice once the sale is made, the service is performed, or payment is received. A pro forma is purely informational and commercial in nature.

 

What does a pro forma invoice look like?

A pro forma invoice template is very similar to a standard VAT invoice and includes similar elements. The key difference is that the document is labeled "PRO FORMA INVOICE," which makes it clear it isn't an accounting document.

A pro forma invoice should include:

• the heading "PRO FORMA INVOICE,"
• the document number,
• the seller's and buyer's details,
• the issue date,
• the payment method and due date,
• the name of the goods or service,
• the net and gross value,
• the VAT rate,
• the VAT amount.

In practice, many businesses also add their bank account number, payment deadline, or order fulfillment terms. That way, a pro forma can double as a clear commercial offer or a payment request.

 

What is a pro forma invoice used for?

A pro forma invoice is mainly informational and commercial in function. You can think of it as a preview of the actual VAT invoice, or as confirmation of the terms of cooperation before a transaction is finalized.

It's issued, among other reasons:

• to confirm the agreed terms of a transaction without any obligation to record it in the books,
• as a commercial offer presented in an organized format,
• as a document stating the amount due before an order is fulfilled,
• as a payment reminder or a request for payment,
• as part of a sales process built around prepayments or advances.

In practice, pro formas are often used in e-commerce, B2B services, and when working with new clients, where confirming payment in advance makes the transaction more secure.

 

When can't a pro forma invoice be used?

Although issuing a pro forma is optional, there are situations where it shouldn't replace the proper accounting document.

A pro forma isn't issued:

• after the goods have been delivered or the service performed — a VAT invoice must be issued instead,
• after payment has been received — an advance or final invoice must be issued instead,
• as an alternative to a VAT invoice,
• as a document that serves as the basis for tax settlements or VAT deduction.

It's worth remembering that overusing pro formas in place of invoices can lead to errors in your settlements and problems during a tax audit.

 

Who has to issue a pro forma invoice?

A pro forma invoice isn't a mandatory document, so no business is required to issue one. The decision to use it is entirely up to the company's business needs.

Many businesses use pro formas as a standard part of their sales process — especially in situations where payment needs to be confirmed in advance or a detailed offer needs to be presented to the client.

 

Why is it worth issuing a pro forma invoice?

Although a pro forma invoice has no tax consequences, using one can bring plenty of business benefits. It's a tool that makes communicating with clients easier and keeps the sales process organized.

The main benefits of issuing a pro forma:

• clearly informing the client about the price and scope of the service,
• the ability to show what the final VAT invoice will look like,
• presenting the offer in a professional, organized format,
• making it easier to collect a prepayment or advance,
• no need to issue a correction if the terms of the transaction change,
• boosting the company's credibility in the eyes of the customer.

This means a pro forma invoice can genuinely support sales and improve a company's cash flow.

 

Download the free pro forma invoice template (XLSX)

Using a ready-made pro forma invoice template is a quick and convenient way to prepare a professional document. Our XLSX template was developed by TaxCoach's experts and meets all the standards used in business practice.

It's an ideal solution for business owners who want to operate efficiently, professionally, and in line with good market practice.

 

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