A pro forma invoice, often called a commercial invoice, is a document that outlines the products or services provided to a customer, along with their associated costs and payment terms. It serves as a preliminary invoice, providing an overview of the transaction before the final invoice is issued upon completion of the order. A pro forma invoice typically includes essential information such as the seller’s and buyer’s contact details, a description of the goods or services, quantities, unit prices, total amounts, payment terms, and any applicable taxes or discounts.
Pro forma invoices serve multiple purposes. Primarily, they allow businesses to secure customer approval and commitment before proceeding with an order. By providing a detailed breakdown of the transaction, pro forma invoices help manage customer expectations, minimize errors, and facilitate smoother payment processes. Additionally, they can serve as a record of the agreed-upon terms between the parties involved.
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