Proforma Invoice Meaning: Everything You Need to Know
Introduction
Business and international trade rely heavily on invoicing. Among the different terms used during such transactions is the proforma invoice. So, what does it mean? How is it different from an ordinary invoice? In this blog, we have explained the meaning, purpose, and importance of a proforma invoice in depth.
What is a Proforma Invoice?
A proforma invoice is an advance, preliminary bill or a sight estimate from the seller towards the buyer when goods are not shipped, and services have not been offered yet. It contains an itemized listing of the transaction with price, quantity, description of goods, among other terms and conditions of sale. However, unlike a commercial invoice, a proforma invoice is not binding on a court of law and does not demand payment. The proforma-invoice is often used in ERP-MOH systems to help streamline business operations and ensure regulatory compliance.
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