A proforma invoice is a preliminary document that looks like an invoice but is not a request for payment. It tells a buyer what an invoice will say, before the supply happens.
It is not a tax invoice, and a client cannot claim input VAT against one.
Where a proforma invoice is actually used
- Getting a purchase order raised. Many companies need a document with amounts on it before finance will issue a PO.
- Requesting payment up front. Where you supply only once the money is in.
- Imports and customs. Proformas are standard in the shipping paperwork chain.
- Budget approval. Giving a client something formal to take to a decision maker.
Proforma, quotation and tax invoice
| Quotation | Proforma invoice | Tax invoice | |
|---|---|---|---|
| Sent | Before the work | Before the supply | After the supply |
| Purpose | Offers a price | Confirms what will be invoiced | Requests payment |
| Demands payment | No | No | Yes |
| Claim input VAT | No | No | Yes |
| Expires | Yes | Usually | No |
The distinction that matters for VAT: a proforma does not trigger a tax point. You have not made a supply and you do not account for output tax on it. Once the supply happens, you issue the actual tax invoice.
Getting it right
- Label it clearly: Proforma Invoice. Never just Invoice.
- Use a separate number sequence, or a suffix, so it never enters your invoice sequence.
- Show what the VAT will be, but be clear that it is not a tax invoice.
- Issue the real tax invoice once the supply is made, and reference the proforma.
A proforma that is not clearly labelled will end up in someone's accounting system as an invoice. That is a problem for both sides.
Common questions
Can a client pay against a proforma invoice?
They often do, particularly where payment is required up front. You still issue a tax invoice once the supply is made.
Does a proforma need a sequential number?
It is not a tax invoice, so the VAT Act numbering requirement does not apply, but a separate sequence keeps your records clean.
Is a proforma legally binding?
It is generally treated as a commitment to supply on those terms, similar to a quotation, rather than a demand for payment.
Quote to Invoice keeps each document type on its own numbering, so a proforma never lands in your invoice sequence.
Create your invoiceDisclaimer: This content is for general information only and does not constitute legal, tax, accounting or financial advice. Always confirm important requirements with SARS, the relevant authority or a qualified professional.
