Proforma Invoice
Category: Documents
Definition (plain English)
A pre-contract or pre-shipment seller document that fixes the proposed goods, price, currency, Incoterm, payment schedule, beneficiary details, and shipment assumptions before a PO, deposit, or production release.
Why it matters commercially
Finance, sourcing, and operations often approve money and production from the proforma, so errors can create payment fraud, wrong Incoterm scope, weak release triggers, and later invoice/document mismatches.
Example
A buyer stopped a 30% deposit because the proforma named a different beneficiary from supplier onboarding records and used CIF Hamburg while the approved PO expected FOB Ningbo.
Common mistake
Treating the proforma as safe to pay without matching legal entity, beneficiary bank, quote validity, Incoterm named place, quantities, shipment window, and payment trigger to the approved deal file.
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