What is a proforma invoice and why do we use it?

What is a proforma invoice?

A proforma invoice can be a part of a commercial offer which is used to request payment from the committed buyer for goods or services before they are supplied.

Proforma invoices can be considered to be draft invoices that let both sides of the transaction verify the correctness of the data for which it will be issued. Once you agree to everything, then we can deliver the service and issue a formal invoice.

What's the difference between a pro forma and an invoice?

Although a proforma includes much of the same information that an invoice it doesn’t carry the same legal weight and shouldn’t be used for accounting purposes, or as a binding agreement. A pro forma invoice must contain a clear indication that will allow it to be distinguished from an invoice - generally this is the annotation "pro forma" in the name of the document.

A proforma invoice cannot be subject to legal and tax consequences and you cannot use it to for accounting purposes.

What's the purpose of proforma invoices and when are they issued?

The pro forma invoice is a convenient and increasingly common solution. It allows you to:

• present the details of the transaction;
• to elaborate on the details of the offer;
• make corrections before issuing an invoice;
• reduce the need to issue credit notes and corrected invoices;
• present what the final invoice will look like.

The pro forma can also be used as an announcement that a regular invoice will be issued in the near future. Sometimes it is also used as an informal call for payment of an overdue invoice.

Pro forma in Useme

In Useme, the initiating party is always the freelancer, so we need to verify the details and value of the billed work before we issue the formal accounting documents.

All corrections or misunderstandings slow up the process, which Useme aims to simplify and speed up.

The pro forma allows the employer to verify if the subject of the deal and the recipient's data correspond to what was previously agreed. In proforma invoice we can edit each item as indicated by the parties based on a written request sent by e-mail or made by phone. In the case of an invoice, which is an accounting document, such a solution requires generating additional documents, often those that need to be sent by traditional mail.

Thanks to the proforma invoice, the customer is assured that the final document he will receive - an invoice from Useme - will contain correct data.

In order to start the transaction, the proforma invoice must be paid: it is a confirmation for us that the offer has been accepted and the transaction has begun. This is of particular importance, because in this way, you as a customer confirm the acceptance of the work already done or confirm the order of a specific offer.

We issue an invoice in Useme immediately after the payment for the paid pro forma is recorded. 

Thus, if you pay the pro forma using fast online transactions (e.g. fast transfer, card transaction), you will receive an invoice in real-time. 

What should a proforma contain?

Although a pro forma is not an accounting document, it must contain the data that will appear on the final invoice. These include:

• the title, along with an indication of the proforma and the document number;
• data of the issuing entity and data of the invoice recipient;
• the subject of the transaction;
• the value of the subject of the transaction in gross and net amounts;
• the payment date.

Why doesn't the proforma invoice contain an ID number?

Since the proforma invoice is a commercial offer, not an accounting document we do not put the ID number on it to avoid misunderstandings.

This number is visible on all invoices issued by Useme, both Polish and international.