A proforma invoice is a preliminary invoice the supplier issues before shipment. It sets out what will be sold, on what terms, and is often the document you pay an advance against, open a letter of credit from, or use for import permits. It should match your contract exactly.
It is not the final commercial invoice. That comes after loading, with actual weights and container numbers. But errors in the proforma usually carry forward, so get it right. Banks and permit offices may ask for a signed copy, so keep one on file with the contract.
What a good proforma includes
- Supplier's full legal name, address, IEC, GST number and contact details.
- Your company's full legal name and address, as you want them on the shipping documents.
- Proforma number and date, with a validity period.
- Product name, grade and a reference to the agreed specification.
- HS code, so both customs teams use the same classification.
- Quantity, with any tolerance, such as plus or minus a small percentage.
- Packing: bag type, net weight per bag, number of bags, marking and labelling.
- Unit price, total value and currency.
- Incoterm, edition and named place, such as FOB Mundra Incoterms 2020.
- Port of loading and port of discharge.
- Latest shipment date or shipment period.
- Payment terms: advance percentage, balance trigger, or LC details.
- Supplier's bank details, matching the account you verified.
- Documents the supplier will provide, such as phytosanitary and origin certificates.
Points that cause trouble later
A vague product line, such as cumin seeds without a grade, purity or reference to a spec, leaves room for dispute. Refer to the specification by number and date. See how to write a specification.
Missing tolerances on quantity can create a mismatch with a letter of credit. If the LC allows a range, the proforma should too.
A proforma with no validity date can be withdrawn or repriced when the market moves. Agree how long the price holds, and confirm acceptance in writing within that time.
If your country requires a permit or registration before import, the authority may need exact product names and HS codes. Use the same wording throughout.
Before you sign or pay
This is general guidance, not legal advice. For checking bank details, see how to check bank details are genuine.
- Check it against the contract and the spec, line by line.
- Confirm the bank details by phone on a known number.
- Ask for corrections in writing, with a new proforma number.
- Sign or stamp it as accepted only once it is correct.
How we help
We draft or review the proforma against the specification, Incoterm and payment terms you agreed, so it can be used cleanly for your advance or letter of credit. We then check the final invoice against it. Ask for a free sourcing review.