Proforma Invoice

- Purpose
 

A Proforma Invoice is a preliminary, non-legal document used to present a price quotation or cost estimate to a customer before issuing a real (tax) invoice.
 

It clearly outlines:
 

• Products or services

• Quantities

• Prices

• Taxes (for reference)

• Discounts

• Total estimated amount
   

However, it does NOT request payment and does NOT create a legal or accounting obligation.

Proforma Invoices are commonly used in sales discussions, approvals, international trade, and pre-order confirmations.


 

- When to Use a Proforma Invoice
 

Use a Proforma Invoice when:
 

• A customer needs a quotation before approval

• Prices must be reviewed internally

• Work should begin only after customer confirmation

• A client requires a document for budgeting or internal approval

• You want to lock prices before issuing an official invoice

• You want a smooth conversion to a real invoice later
  
  
   

  -  How to Use – Step-by-Step (User Flow)
   

  1️⃣ Create Proforma Invoice
   

• Navigate to Documents → Proforma Invoice

• Click Add Proforma Invoice

• Select or create a customer

• Choose company/invoice settings

• Select document language and currency
  
  
   

  2️⃣ Add Products or Services
   

• Add one or multiple line items

• Define:

  • Product or service name

  • Quantity

  • Unit price

  • Discount (percentage or fixed)

  • Tax rate (display only)
     

•  Tax is shown for transparency but not legally applied.
  
   

  3️⃣ Review Pricing & Totals
   

• System calculates:
   

  • Subtotal

  • Estimated tax

  • Discount

  • Estimated final amount

• All amounts are informational only
  
   

  4️⃣ Save Proforma Invoice
   

• Proforma Invoice number is generated

• Document is saved with non-binding status

• No accounting or payment impact occurs
  
  
   

  5️⃣ PDF Generation
   

• Professional PDF is generated automatically

• Clearly marked as “Proforma Invoice”

• Includes:

  • Company details

  • Customer information

  • Itemized pricing

  • Notes and terms
    
     

    6️⃣ Share with Customer
     

  • Send via:
     

    • Email

    • WhatsApp (if enabled)

  • Customer reviews and decides whether to proceed
    
     

    - Payment Behavior (Important)
     

    - Payments are NOT allowed on Proforma Invoices

  • No payment methods available

  • No receipts can be generated

  • Proforma Invoices are informational only.
    
    
     

    -  Conversion to Real Invoice
     

    Once the customer approves:
     

    Conversion Process
     

  • Open Proforma Invoice

  • Click Convert to Invoice

  •  This avoids re-entering data and prevents errors.
    
    
     

    - API Support – Automation & Integration
     

    Proforma Invoices are fully supported via API.
     

    API Capabilities
     

  • Create Proforma Invoice via API

  • Retrieve Proforma Invoice list

  • Fetch Proforma Invoice PDF

  • Convert Proforma to Tax Invoice

  • Link Proforma to orders or projects
    
    
     

    ⚙️ Settings That Affect Proforma Invoices
     

    Invoice & Company Settings
     

  • Company details & logo

  • Document numbering format

  • Currency & language

  • Template design
    
    
     

    Tax Settings
     

  • Display tax or hide tax

  • Include/exclude tax for preview

  • Rounding rules
    
    
     

    template Settings
     

  • Proforma-specific template

  • Custom header/footer

  • Terms & conditions

  • Branding colors and fonts
    
    
     

    - Relationship with Other Documents
     

    Proforma Invoices can be linked to:
     

  • Tax Invoices (after conversion)

  • Order Proposals

  • They do not link to:

  • Receipts

  • Payments

  • Credit Notes
    
    
     

    ✅ Benefits of Using Proforma Invoices
     

    ✔ Professional price quotations
    ✔ No legal or tax obligation
    ✔ Easy customer approval
    ✔ Prevents billing errors
    ✔ Fast conversion to invoice
    ✔ API-driven automation
    ✔ Clean separation from accounting
    
    
     

    - Summary
     

    A Proforma Invoice is an essential pre-billing document that allows businesses to present pricing clearly, gain approval, and prepare for billing — without affecting payments, taxes, or accounting.
     

    It provides:
     

  • Transparency for customers

  • Control for businesses

  • Speed and accuracy when converting to real invoices

  • Projects

  • Customers

• System copies:

  • Customer data

  • Items

  • Prices

  • Discounts

  • Tax settings

• New Tax Invoice is created

• Invoice number is assigned

• Payment tracking begins