First of all, it is important to point out that the proforma invoice has no fiscal or accounting validity.
What is a proforma invoice?
What is the proforma invoice for?
The proforma invoice contains the details that will be later included in the final invoice, which will be those that will finally be valid for tax purposes. It is generally issued by the supplier, either on his own initiative or under request of the customer, so that the buyer has all the necessary information before concluding the transaction. This document details a commercial offer, indicating the exact form of the invoice that will finally be issued when the sale or supply has been carried out.
It is a particular invoice for its legal and commercial nature and because it lacks fiscal and accounting validity. This invoice can be compared with a quotation and is very useful for the buyer to confirm his details and the transaction.
These invoices are not part of the company’s accounts and the right to recover the VAT paid to the tax authorities on invoices to customers in insolvency proceedings does not apply here.
The mandatory fields that a proforma invoice must contain are as follows:
- Date of issue of the invoice.
- Supplier details: VAT number, business name, company name, contact details, address and VAT if applicable.
- Customer details: VAT number, business name, company name, contact details, address and EU VAT if applicable.
- Description of the products/services.
- Total price of the proforma invoice.
- Currency used in the transaction.
- Applicable charges.
A text must also be included indicating that it is a proforma invoice and must be catalogued with a different numerical series than ordinary invoices. This can be done without numbering.
When should you use a proforma invoice?
It is useful to use this invoice template to “inform your customers of the details of a future final invoice. If your customer agrees with the content of the proforma invoice, you can convert it into a definitive invoice”.
You may also be interested in issuing a proforma invoice when you have to carry out foreign operations, i.e. when a product goes through customs, in order to take into account the value you will have to pay.
On the other hand, the most common time to issue a proforma invoice is when the service to be provided has already been agreed with the customer, or when the customer has already placed the order but has not yet paid for it.
Finally, another case in which it may be useful is in the event of having applied for a subsidy or financing, using it as proof and commitment to an investment to be made, given that, although it is not valid for tax purposes, it proves that there is a commitment to a business activity.