What Is a Proforma Invoice and When to Send One

At FreelanceAtlas, we help freelancers settle payment terms before the work starts. This guide compares a proforma with a final invoice, lists what goes on one and shows how to convert it, with a sample to copy. For the invoice that follows, see How to Invoice Clients as a Freelancer (Step-by-Step Guide), and for deposit terms, Freelance Payment Terms That Actually Get You Paid: Deposits, Milestones, and Net 30.

What a Proforma Invoice Is

The International Trade Administration, part of the US Commerce Department, calls a pro forma invoice “a quote in an invoice format.” Proforma and pro forma are two spellings of the same document. It has priced line items, a total and payment terms, so it reads like a bill, but it lacks the status of one.

HMRC, the UK tax authority, says in its VAT manual that a pro forma normally “cannot be considered to be an accounting document” and “has no place in the books of account of the trader either issuing or receiving it.” It adds that one “should preferably be endorsed ‘This is not a VAT invoice’.”

US freelancers reach the same result through the cash method. IRS Publication 538 says “Most individuals and many small businesses” use it, and under it “you include in your gross income all items of income you actually or constructively received during the tax year.” Sending a proforma moves no money, so it creates no income. The deposit it collects does, on the day it arrives.

Proforma Invoice vs Invoice: Six Differences

A proforma says what you expect to bill, and an invoice says what the client owes.

The last row matters to freelancers registered for VAT in the UK. HMRC’s VATREC9020 says pro forma documents “are not, therefore, acceptable evidence” for a buyer’s VAT claim, and once the issuer is paid or makes the supply, “a full VAT invoice must be issued within 30 days.” US freelancers have no federal VAT, but the habit still helps: keep proformas out of your invoice numbering so your sales records show only real sales.

When a Freelancer Uses a Proforma Invoice

To Collect a Deposit Before Work Starts

Some accounts teams will not pay from an email or a signed contract. They want a numbered document with an amount, a due date and bank details, and a proforma gives them one without you booking a sale for work not yet started. On a $6,400 brand identity project with a 50 percent deposit, the proforma shows the full price and a line reading “Deposit due now: $3,200.”

For International Clients

The ITA page says buyers may need a pro forma to “open a letter of credit or arrange for transfer of hard currency.” A client in a country with currency controls may need your priced document before their bank releases dollars. The receiving costs are covered in How to Get Paid as an International Freelancer: Wise, Payoneer, and the Real Costs.

When a Physical Item Crosses a Border

Digital files skip customs, so this applies only when you ship something real, such as a framed print or a product prototype. In the US, 19 CFR 141.91 lets an importer whose commercial invoice is unavailable for reasons beyond its control file a written declaration and a pro forma invoice instead, with a bond equal to 1.5 times the invoice value, and the real invoice “must be produced within 120 days after the date of the filing of the entry summary.” The importer is your client, and your proforma gives them the figures.

When the Client Needs Internal Approval

Larger clients raise a purchase order before anyone gets paid, and the buyer needs your figures to raise it. So the proforma usually comes first: procurement approves it and issues a PO, you do the work, and your final invoice quotes the PO number. If the PO arrives first, put its number on the proforma, which the ITA list calls the “Buyer’s reference.”

What Goes on a Proforma Invoice

Adapted from the ITA list of 11 items for exporters, a complete proforma shows:

• The title. “Proforma Invoice” at the top. UK VAT-registered freelancers add “This is not a VAT invoice.”
• A number from its own series. PF-2026-007, for example, kept apart from your invoice numbers.
• Issue date and validity date. The validity date stops a client from accepting six-month-old prices.
• Both parties. Your business name and contact details, then the client’s legal name, address and the person who approves payment.
• The client’s reference. A PO number, project code or cost center, if they gave you one.
• Line items. Each deliverable with quantity, unit price and line total, or in the ITA wording, “per unit and extended totals.”
• Payment terms. Deposit amount and due date, when the balance is due, accepted methods and the currency.
• Delivery. Start date and delivery window. For shipped goods, add the weights and dimensions of the products plus the Incoterm.

Sample Proforma Invoice for a Freelance Project

This sample uses the $6,400 brand identity project. Replace the bracketed parts.

PROFORMA INVOICE PF-2026-007
This is a proforma invoice. A final invoice will be issued when the work is delivered.
Issue date: November 2, 2026. Valid until: November 30, 2026.
From: [Your name], [business name], [address], [email]
To: [Client legal name], [address], attention [contact name]
Client reference: [PO number or project code]
1. Logo, color palette and type system: 1 x $4,200.00 = $4,200.00
2. Brand guidelines, 24-page PDF: 1 x $1,400.00 = $1,400.00
3. Business card and letterhead files: 1 x $800.00 = $800.00
Total: $6,400.00 USD
Deposit due within 7 days to hold the November 16 start date: $3,200.00
Balance due within 14 days of final file delivery: $3,200.00
Estimated delivery: final files within 4 weeks of the start date
Payment by bank transfer (ACH or international wire) to: [account name, bank, routing or SWIFT, account number]

The validity date limits how long the prices stand, and the deposit line gives the client one number to pay now.

From Proforma to Final Invoice in Five Steps

1. Send the proforma with the contract. One email, so the client approves scope and figures together. Our freelance contract generator drafts the agreement.
2. Wait for approval. A signature, a PO or the deposit itself. Do not start on a proforma alone.
3. Record the deposit when it lands. On the cash method, a deposit received on December 20 for work delivered in January belongs to the year you received it. Send the client a receipt so their books match yours.
4. Issue the final invoice from your main sequence. Show the full $6,400, subtract “Deposit received, PF-2026-007: $3,200.00” and state the balance and its due date. Our invoice generator lays this out and saves it as a PDF.
5. Close the proforma. Mark it converted and never resend it as a reminder. If the scope changed, issue a change order first so the new total has a signed basis.

Conclusion

A proforma invoice is a priced preview of the bill. It gives a client exact figures to approve, pay a deposit against, raise a purchase order from or file with customs, and it stays out of your books until money or a real sale follows.

Send one with your next quote that needs a deposit or a PO, with its own number series and a validity date. When the deposit arrives, record it, then issue the final invoice from your normal sequence with the deposit subtracted and the proforma number quoted.

Key Takeaways

• The International Trade Administration defines a pro forma invoice as “a quote in an invoice format.”
• HMRC says a pro forma is normally not an accounting document and should preferably carry the words “This is not a VAT invoice.”
• UK VAT-registered sellers must issue a full VAT invoice within 30 days of being paid against a pro forma or making the supply.
• On the cash method, a deposit paid against a proforma is income on the day it is received, not on the day the proforma is sent.
• US customs lets an importer file a declaration and a pro forma invoice with a bond of 1.5 times the invoice value and produce the commercial invoice within 120 days.
• A complete proforma has its own number series (such as PF-2026-007), a validity date, priced line items and the deposit due now.

Frequently Asked Questions

What is a proforma invoice?

A proforma invoice is what the International Trade Administration calls “a quote in an invoice format.” It lists the work, prices and payment terms before the work is done or the goods ship. It is not recorded as a sale, and a final invoice follows once the work is delivered.

What is the difference between an invoice and a proforma invoice?

A proforma shows what you expect to bill and goes out before the work, while a final invoice requests payment for delivered work. The proforma has its own number series and stays out of your sales records. In the UK, HMRC says a pro forma is not a VAT invoice, so a buyer cannot reclaim VAT with it.

What is the purpose of a proforma invoice?

It gives the client exact figures before anything is final. Freelancers use one to collect a deposit, such as $3,200 on a $6,400 project, to let an overseas client arrange a currency transfer, or to let procurement raise a purchase order. Importers also file one with customs when the commercial invoice is unavailable for reasons beyond their control.

What comes first, the PO or the proforma?

Usually the proforma, because procurement needs your figures before it can approve the spend and issue a purchase order. The final invoice then quotes that PO number. If a client sends a PO first, put its number on the proforma as the buyer’s reference.

Does a proforma invoice count as income for taxes?

No. Under the cash method, which IRS Publication 538 says most individuals use, income counts when you actually or constructively receive it, and a proforma moves no money. A deposit paid against it is income on the day it arrives, so a deposit received on December 20 counts for that year even if the work is delivered in January.