If your manufacturing company receives a large order, sending a proforma is a good idea. This is because you could potentially lose time and money by fulfilling an order if your buyer decides to back out last minute due to factors like the cost or delivery timeline. Here are just two cases where a business might choose to use a preliminary invoice: Special Ordersįor manufacturing companies, custom orders are a great opportunity for a proforma invoice. So, when should you use a proforma invoice? Let’s take a look. ![]() Facilitating a company’s internal purchasing approval process.Providing an invoice when you don’t have all the details required for a standard commercial invoice.Declaring the value of goods to customs agencies, ensuring a smooth delivery process.But there are benefits to proformas beyond a courteous heads-up. You’ll provide the goods or service, then issue a final, official invoice to request payment. Your customer will then give final approval to the price and any other terms of service. Once negotiations have finished, and all parties are in agreement, you can send a preliminary invoice as a good faith estimate, letting your customer know exactly what to expect ahead of time. Preliminary invoices streamline the sales process. ![]() What Is the Purpose of a Proforma Invoice? They also give prospective clients a general overview of a sale, including prices, timelines, and terms. Think of them as finalized courtesy quotes that prevent unexpected surprises or disputes down the line. Unlike a final, sales, or tax invoice, proformas are technically not completed since they don’t have a legally-required invoice number. It’s given to a committed buyer ahead of time, ensuring the buyer and seller are both on the same page about the agreement. Simply put, a proforma invoice is a preliminary quote or estimate that outlines goods or services that haven’t been delivered yet.
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