Frequently Asked Question

What is a proforma invoice?
Last Updated 2 years ago

A proforma invoice is a preliminary bill or estimated invoice which is used in the following situations:

  • To inform a committed buyer about the price of goods or services before they are supplied.
  • To request payment from a customer and justify events with a clear track record.

For example, they can be used in hotels and restaurants to record an event (order) that took place prior to the final invoice. In these cases, there is a reference number passed down the chain, these invoices do not affect the tax liability. They are essentially a "good faith" agreement between the seller and a customer, so that the customer knows what to expect ahead of time.

Is it mandatory?

Countries like Samoa and Fiji are not making this mandatory, but for example in Washington State where restaurants are using the system, Department of Revenue makes it mandatory to print proforma when customers make the first order at the table, than another one for the main course, etc, than even at the time when customers plan to pay or split the bill, proformas are used to link those events so Tax Authority officers would have a clear audit trail of the events from customers entry until payment.

Best practice is to check the latest information concerning the policies and regulations of each jurisdiction by contacting their respective legal departments.

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