Have you bought a car or a service that will be provided in the future? If so, then they will have offered you, either online or by mail, a proforma invoice. It is a document that is used in many businesses and that we are not yet clear what it is for or when it is used.
If you are self-employed, offer services online, or if you buy products or services, you should know what a proforma invoice is, what it is like, when it is used, what distinguishes it from a normal invoice, and what it implies for who issues and who receives one. proforma invoice.
This small article will tell you everything you need to know about them, so, at the end, you will know everything we have told you, and some other things that are equally important.
What is a proforma invoice?
Una Proforma invoice is a kind of draft of a normal and current invoice, but without having a book value.
It serves for promise future delivery of a product or service to a customer, which will then be issued a normal invoice with the same data and amounts contained in the proforma invoice.
It is a commitment from the seller to the buyer that he will provide a product or service at a certain price.
For example: a person in Jarandilla de la Vera is looking for a car online, an SUV, for example, the Nissan Juke.
He does not find any in the north of Cáceres, and he finds one, at an excellent price, in Alcalá de Henares, in Madrid, but he cannot go immediately, or the seller does not yet have the car ready to deliver.
To ensure that the customer will have his car at the price he found, the seller or the dealer sends him a Proforma invoice to guarantee the price and the sale of the car.
In summary: it is a commercial commitment.
What is a proforma invoice for?
Many often mistake a proforma invoice for an invoice, but this is not the case.
Before you can explain a little better what it is for, you should know that a proforma invoice has the same accounting validity as, for example, a quote, or a sales offer, that is, no value for accounting purposes, so no issuance of any proforma invoice should be declared.
It serves more than anything so that both seller as buyer protect themselves in case the price changes, or to guarantee the value of a transaction, and is used not only in small purchases but also in international commercial operations of quantities of products and huge money, in order to document the value of transactions, or as models of sale offer .
For the buyer it represents the security, as in the previous example, that his Nissan Juke will have at the agreed price, even if weeks have passed, and in that period the price has risen ... or fallen. What it does not represent for the buyer, is a guarantee in case the car turns out to be defective ... for that the normal invoice, or the contract is used.
You must be clear about the difference, and whether you are a seller or a buyer, never confuse the obligations and everything that a proforma invoice implies for what it does not, without ever confusing it with the invoice.
What does a proforma invoice contain
The main reason why people often mistake a proforma invoice for a normal invoice, is that they contain the same data.
Practically the only difference is that the proforma invoice must clearly and visibly contain the title "PROFORMA”In the title of the document, and that may or may not be numbered or folded like invoices.
The data that a proforma invoice must contain are the following:
- The title must have the title "proforma invoice", clearly and highly visible
- The issue date of the proforma invoice
- Provider details:
- Trade name or company name
- Company Tax Code
- Contact details
- Community VAT number
- Customer data:
- Full name or company name
- NIF, DNI or NIE
- Contact details
- Clear and detailed description of the merchandise or services, clarifying the quantity or units of the product
- Unit price, total price and / or currency in which the transaction is carried out (rá)
- The costs of insurance, transport, additions, etc.
- Number of packages, gross weight, net and volume
- Payment method and conditions
- Document validity date
For international transactions, which is when they are most used:
- Tax identification number (in case of community operations)
- Order reference
- Origin of the merchandise
- Conveyance
- Document validity date
Nor is it necessary for it to contain a signature or company stamp, unless the client requests the proforma invoice to be stamped.
What is the validity of a proforma invoice?
There is a problem regarding the validity of a proforma invoice.
Simply because its validity, as we have told you, does not go beyond having a informative character or as a sales proposal, such as a sales quote or offer sent to a customer or prospect.
It does not serve as proof of payment, or to demand anything related to the invoice or as an accounting document.
What is it for then? It is only valid as a promise to respect the price of the products or services during the validity period contained in the proforma invoice.
It has no other validity of any kind, and is used more frequently in international transactions, both within and outside the European Union, although only the name of the document changes.
When can you use a proforma invoice?
Although the main use is that of the promise to deliver a product or service, is not the only one that has, in practical, non-legal ends.
Imagine that you are not sure of the client's data, for example you are missing the person's ID, and their fiscal address and you cannot communicate with the client, but you must send the client a document, even if they have asked you for an invoice.
As it has, for practical purposes, no validity, you can use it as a draft.
It sends it to your client, or you as a client receive it, with 'false' or example data, and if both agree, the client sends their correct data, accepts the prices and quantities and related expenses, then, now, yes, you can make the final normal invoice.
That is, in addition to serving as the delivery promise, it is a draft so as not to 'spend' normal invoices, something that, as you well know, you cannot emit like that because yes.
If you do not use proforma invoices, you should give them this use. If you are a client, you can request one to save time in case you want to think better about the possible purchase or contracting of services or products.
Also the supplier or the company, can use the proforma invoice to save time in case you have run out of normal invoices. You can send you a proforma invoice so that the client has the promise of the delivery of a final invoice as soon as he has this document, so that when he has them again, he is not affected by possible fluctuations in the price of the products or services. bought.
Some examples where proforma invoices will serve you
Although we have only mentioned some uses of the proforma invoice, it really serves you for more things than you imagine.
We give you some examples where proforma invoices will be very helpful:
1.-International shipments
Normally, proforma invoices are used by customs, inside and outside the European Union to show the value of the merchandise to be transported.
2.- Subsidies and grants
Certain grants, such as those given to new freelancers, require the investment of certain amounts in the business, and you can present a proforma invoice to justify them.
3.- In financial operations
When someone applies for loans, be it a company or individual, the person or company is required to make certain investments, and to justify it as a guarantee or guarantee, the corresponding proforma invoices are presented.
4.- As a section system
Some businesses use this document to 'separate' certain products. For example, if a customer does not have enough money or the supplier does not have the unit available, it can serve as a set aside system, in order to shield the volatility of the product.
5.- Sale offer
Finally, we have mentioned it, but it is another use: sale offer. You can send sales offers in the form of a proforma invoice, at a discounted price than what you offer to the rest, and in this way, you oblige yourself to respect the price within the term offered.
Conclusion
A proforma invoice is the guarantee that this price will be valid in the period that it stipulates and has no accounting validity. or anything, it is a promise only, but you can use it as a draft and like many other uses, even in international transactions, especially in customs, inside and outside the European Union.
Hello,
I congratulate you for such an interesting article. One of the few so complete that I have found on proforma invoices. The only thing is that I could not avoid reading that you put the community VAT number as mandatory information on the proforma invoice, but this is only for those operators that are under the ROI or Registry of Intra-Community Operators, a registry in which they are only found those international operators. For example, in the example that was exposed at the beginning about the car, since it is a national operation, it does not need an intra-community VAT number. In this case, one should use mode 036 and indicate it in box 129.
Finally, I wanted to add that the profroma invoice is used by importers to request the import license, as proof that this international transaction is going to take place.
Greetings,
Sergio
Consult, the proforma invoice that the buyer signs, is it taxed in stamp tax?