Proforma invoice is an estimated invoice or a preliminary bill that is shared with the prospective buyer, before the products or services are delivered to him or her. The purpose of pro forma invoice is to give an estimate of the closing price and seek approval from the buyer. Once the customer agrees to the details in the proforma invoice, you can send the products or services.<\/p>\n\n\n\n
It can be used for the internal purchase approval process, declaring the value of import goods for customs, or a preliminary invoice with a quotation when details for a commercial invoice are not available. Its main benefits include streamlined sales processes and smoother delivery processes.<\/p>\n\n\n\n
Suggested Read: How to Create Performa Invoice in TallyPrime?<\/a><\/strong><\/p>\n\n\n\n Unlike an invoice, it is not a payment request or demand. Although it includes shipping charges and applicable taxes to ensure precise price estimates for buyers, it is subject to change. No one can use it for accounting tasks. It does not have an invoice number as the work is still in progress when it is sent and hence, you cannot use it for legal purposes.<\/p>\n\n\n\n You can create pro forma invoices in common applications like Microsoft Word and Google Docs. To speed up the creation process, you can go for accounting or invoicing software solutions that already have customizable proforma invoice templates.<\/p>\n\n\n\n A proforma invoice must include a note stating, \u2018This is not a GST invoice\u2019. Other than that, it usually includes most parameters that are present in the final invoice. The following details of the proposed transaction are present on a standard basis:<\/p>\n\n\n A tax invoice is a legal document that is sent to the customer by the supplier as a request for tax inclusive payment for the sale of goods and services. It includes the quantity, prices, discounts, credits, description, taxes, and total due on goods and services. The invoice acts as evidence of supply as goods are supplied at the invoice issue date or payment receipt date, whichever is earlier.<\/p>\n\n\n\n Every registered GST taxpayer is bound to issue tax invoices at the time of supply according to Section 31 of the CGST Act. The invoices are useful for financial reporting, monthly, quarterly, or annually. They are sent to the tax authority at the end of the financial year.<\/p>\n\n\n\n Suggested Read: Best Free Invoicing Software for Small Businesses<\/a><\/strong><\/p>\n\n\n\n If the objective of buying is resale, customers can get an input tax credit on various charged taxes (GST, VAT, or HST). Tax-registered buyers need it to determine the time limit for the taxable supplies and make input tax deduction claims on purchases. In the case of unregistered suppliers, the customer needs to issue a tax invoice and payment voucher.<\/p>\n\n\n\n Like for a proforma invoice, invoice generation software tools offer customizable templates for tax invoices in different industry\/ business categories. The tax calculation by the accounting software<\/a> is dependent on the date of the tax invoice. Such tools improve the efficiency of invoice creation and reduce manual work.<\/p>\n\n\n\n A tax invoice often includes the following:<\/p>\n\n\n Suggested Read: Best Sites to Download Free Invoice Templates<\/a><\/strong><\/p>\n\n\n\n Here\u2019s a quick summary of Proforma vs tax invoice:<\/p>\n\n\n\n<\/span>What\u2019s Included in Proforma Invoice?<\/span><\/h2>\n\n\n\n
![\"Proforma](\"https:\/\/cdn.techjockey.com\/blog\/wp-content\/uploads\/2022\/02\/11165111\/Pro-Forma-Invoice-template-1024x536.jpg\")
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<\/span>What Is Tax Invoice?<\/span><\/h2>\n\n\n\n
<\/span>What\u2019s Included in Tax Invoice?<\/span><\/h2>\n\n\n\n
![\"Tax](\"https:\/\/cdn.techjockey.com\/blog\/wp-content\/uploads\/2022\/02\/11165129\/Performa-vs-tax-invoice-1024x536.jpg\")
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<\/span>Proforma Invoice Vs Tax Invoice: Comparison Table<\/span><\/h2>\n\n\n\n