A proforma invoice is a preliminary bill of sale a seller sends before goods are shipped or services delivered. It states what will be supplied and at what price, but it is not a demand for payment and creates no accounting obligation. The name comes from the Latin for 'as a matter of form': it documents the intended transaction rather than recording a completed one.
That last point matters more than it looks. When proforma and commercial invoices share a numbering series, the two documents become difficult to tell apart later, which is the root of most duplicate-payable problems described below.
They can look nearly identical, which is exactly where problems start. The difference is timing and legal weight. A proforma invoice is issued before the transaction, is not a request for payment, and is not recorded in the accounting system. A commercial invoice is issued after goods ship, is a legal demand for payment, and posts to accounts payable.
EXAMPLE
A supplier sends a proforma for $34,000 covering a pending order so the buyer can clear customs and secure internal budget approval. Three weeks later the goods ship and the supplier sends the commercial invoice for $34,000. Only the second document should ever reach accounts payable.
A proforma is also distinct from a quotation, though the two overlap. A quotation is an offer open to negotiation; a proforma generally reflects terms both parties have already agreed and is often issued specifically so the buyer can act on them.
Yes, and it is common practice. Suppliers frequently issue a proforma specifically to request a deposit or full prepayment before beginning production or releasing a shipment, particularly with new customers or international orders.
The accounting treatment is what changes. A payment made against a proforma is recorded as a prepayment or advance to the supplier, not as settlement of a payable, because no payable exists yet. When the commercial invoice arrives, the advance is applied against it.
EXAMPLE
A buyer pays a 30% deposit of $10,200 against a $34,000 proforma. That $10,200 is booked as a supplier advance. When the commercial invoice for $34,000 posts, the advance clears against it and $23,800 remains payable.
A proforma invoice should never be posted as a payable. No goods have been delivered, no service has been performed, and no enforceable obligation exists. Recording one overstates liabilities and creates a payable that the eventual commercial invoice will duplicate.
Because a proforma carries the same fields as a real invoice, it frequently gets keyed into accounts payable by mistake. When the commercial invoice arrives weeks later with a different document number, the ERP has no way to recognize them as the same transaction. The result is two open payables for one purchase.
EXAMPLE
A proforma for $34,000 is keyed on March 3. The commercial invoice for the same order arrives March 24 with a different number and is keyed as a separate payable. Total recorded liability is $68,000 against a $34,000 purchase, and unless someone catches it before the payment run, the supplier gets paid twice.
This is a recurring finding in duplicate payment audits, and it is most common in businesses that import goods, where proformas arrive routinely as part of shipping paperwork rather than as an exception.
Most accounting systems have no dedicated proforma document type, which is the underlying reason these get mishandled. The common workarounds each have a tradeoff:
Whichever route is used, the control that matters is the same: something has to recognize that an inbound document is a proforma before it reaches the AP queue, rather than relying on a clerk to notice.
