Proforma invoice in Nigeria: what it is and when to use it
A proforma invoice is a preliminary invoice you send before goods are delivered or work is done. It lets the customer see the cost, arrange payment or documents, and confirm the order.
What a proforma invoice means
"Pro forma" means "for the sake of form". It looks like an invoice, but it is an advance document, a statement of what you intend to charge. It is usually not your final request for payment. After the sale is complete you issue the real invoice.
When to use one
- When a customer needs a price document to raise funds or get approval before paying.
- When you are quoting for imports or exports, where customs or banks ask for one.
- When you want to confirm an order and price before you buy stock or start production.
- When you take a deposit before the full invoice is ready.
Proforma invoice vs quotation vs invoice
- Quotation: a price offer. The customer may or may not accept.
- Proforma invoice: a pre-sale invoice, usually after the customer has shown clear intent to buy.
- Invoice: the final request for payment after delivery or completion.
More on the differences in invoice vs receipt vs quotation.
Template
PROFORMA INVOICE
[Your business name] · [Address] · [Phone] · [Email]
Proforma no: PRO-0001 Date: [DD/MM/YYYY] Valid until: [DD/MM/YYYY]
Customer: [Name and address]
| Description | Qty | Unit price | Amount |
|---|---|---|---|
| [Item] | [ ] | ₦[ ] | ₦[ ] |
| Total | ₦[ ] | ||
Payment terms: [e.g. 50% before production, balance on delivery]. Delivery time: [ ] days.
This is a proforma invoice. It is not a demand for payment and is not a tax invoice.
Things to get right
- Mark it clearly as Proforma so no one mistakes it for a final invoice.
- Give it its own numbering, such as PRO-0001.
- State how long the prices are valid.
- Do not count it as income until you issue the real invoice and are paid. Ask your accountant how to record it.
Questions people ask
Is a proforma invoice legally binding?
Usually not on its own. It is a statement of expected charges. A signed order or accepted quotation carries more weight. Ask a lawyer about specific contracts.
Can a customer pay against a proforma invoice?
Yes, many do, especially for deposits. Issue a receipt when the money arrives, and a final invoice when the sale is complete.
Is a proforma invoice the same as a quotation?
They are similar, but a proforma looks like an invoice and is usually sent once the customer has decided to buy.
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